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Export surge cheers Japan

Tokyo, Aug. 22 (Reuters): Japanese exports rose for a fourth straight month in July, giving manufacturers some relief from poor demand at home, but a resurgent yen and shaky consumer confidence in the United States looked set to dampen growth. Exports climbed 8.9 per cent from a year earlier, less than expected by financial markets, while imports gained for the first time in a year by a 0.6 per cent, the Finance Ministry said, confirming figures it released in error a day earlier.

As a result, the customs-cleared trade surplus expanded for a fifth straight month by 80.3 per cent to 752 billion yen ( $ 6.35 billion) — short of the 893 billion yen expected by economists and a slight slowdown from rates in May and June.

Exports have propelled two straight quarters of factory output to pull Japan from its worst recession in living memory last year. But the rise in July was below the 10 per cent markets had expected and stoked hopes that speculation growth was slowing.

“Exports remain favourable, continuing to support the economy,” said Soichi Okuda, senior economist at Aozora Bank. “That said, there was less of an increase than expected. The yen is getting stronger and the US economy is not in particularly good shape, which had an impact, and this may well continue in the future.”

Exports to the United States, Japan’s biggest trading partner, fell one per cent despite a 10.6 per cent leap in automobile shipments, suggesting a key pillar of support for the Japanese economy could be weakening.

Exports to Asia were up 19.0 per cent and those to the European Union rose 7.8 per cent. “We are worried about the US economic outlook,” said Yasuhiro Fukagawa, a spokesman at Matsushita Electric Industrial Co, the world’s second-ranked consumer electronics group.

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