The Japan Times reported that Japanese exports continued to increase with a preliminary gain of 14.4% in September, but the pace is slowing because of the yen's summer surge and sluggish consumption in other Asian economies.

The value of exports expanded for the 10th consecutive month to JPY 5.843 trillion as compared with the previous year. That's slower than the downwardly revised 15.5% logged in August and the 23.5% logged in July, which is raising government concern that weakness in exports and industrial output is slowing down the economy.

For the first half of fiscal 2010, exports rose by 25% from a year ago to JPY 34.1 trillion while imports gained 20.8% to JPY 30.68 trillion. The caused the trade surplus for the April to September half to leap 83% to JPY 3.42 trillion.

The Finance Ministry said in the preliminary report that in September 2010 alone, imports grew 9.9% to JPY 5.046 trillion, for a ninth consecutive monthly increase, while the trade surplus sharply rose 54% to JPY 797 billion for the first gain in two months.

Exports to China and other Asian economies were up 14.3% to JPY 3.207 trillion, the 11th consecutive monthly gain, but were slower than the 18% logged in August, the 23.8% in July and the 31.6% in June.

As for trade with China alone, Japanese exports rose a slower 10.3% to JPY 1.081 trillion. While this represents the 11th straight month of growth, the pace overall continues to fall.

Last week, the government downgraded its assessment of the economy, for the first time in nearly two years, underscoring Japan's weak exports and slowing industrial production. The monthly report also pointed to slower economic growth in Asia, warning that a slump in the United States and Europe could cause the economic environment to deteriorate.

The sluggishness in Japanese exports to Asia contrasts markedly with their earlier strength as revealed in the ministry's six months of data, which said Japan's JPY 5.23 trillion trade surplus with the region during the half year period was the highest on record.

Nearly 60% of Japanese exports are contracted in foreign currencies. When the yen strengthens, the value of those exports diminishes.

Mr Lee Chi Woong, economist at Goldman Sachs in Japan, said in his report that "It requires attention that there is a high possibility that additional and prolonged strength of the yen could accelerate the slowdown of exports."

(Sourced from www.japantimes.co.jp)