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. Last Updated: 07/27/2016

Japan Trade Surplus Jumps 80%

TOKYO -- Japan's trade surplus jumped 80.9 percent from the year earlier in November as the country exported more cars and high-tech equipment, the Finance Ministry said Tuesday.

The ninth-straight month of gains in the trade surplus -- to 890.50 billion yen ($7.39 billion) -- underscored how Japan's economy continues to be supported by overseas demand.

Although last year's figures were distorted by the Sept. 11 attacks on the United States, November exports were also up 5.3 percent from October on a seasonally adjusted basis.

The surplus was larger than a median forecast for a 13.9 percent rise to 797.3 billion yen by economists polled by Reuters last week.

Exports to the United States and Asia have fueled a modest economic recovery in Japan by increasing demand for locally made high-technology products.

But as the government acknowledged in its monthly economic report for December last week, there is a risk this recovery may come to a halt in response to a slowing global economy.

"This year-on-year double-digit gain in the trade surplus is expected to continue going forward due to solid exports," said Shinichi Sato, fixed-income strategist at Mitsubishi Securities.

"On top of growth in exports to Asia, exports to the U.S. and Europe region have bounced," he said.

A ministry official was a bit more cautious.

"We must keep in mind that we're comparing the figures with a year ago, which was really a very low point for the economy," he said.

"However, that said, the figures also show firm U.S. demand for consumer items, including automobiles," he added.

Even so, Japan's exports grew at a brisk pace in November, fueled by strong demand from Asian neighbors such as China, offsetting worries about possible fallout from a U.S. slowdown.

Exports rose 19.2 percent from a year earlier to 38.5 billion, the eighth-straight month of gains on a year-on-year basis.

The figures appeared to defy growing worries that Japan's export-driven recovery since the start of the year is losing steam.

Cars, office equipment and electronic components led the gains, with Asian countries like China and Thailand among the main buyers.

"Exports to Asia have been strong, as was the case in October," said Minako Iida, economist at Deutsche Securities.

"In the past, the main export market for most Asian countries had been the U.S. But trade within Asia now has a bigger weight and is making the regional economies more resilient to a slowdown in the U.S. or Europe."

A regional breakdown showed that exports to Asia increased 26.4 percent year on year, while those to the United States rose 17.5 percent.

Exports of motor vehicles to Asia surged 78 percent in terms of units sold.

The fastest growth was to China, where rising incomes, lower prices and reduced tariffs on imported vehicles have fueled a boom in demand and turned the country into the world's third-largest market for cars.

Passenger car sales in China in the first 11 months of this year topped 1 million units for the first time ever, and Japanese manufacturers are rushing to keep up.

Honda Motor Co. said earlier this month it planned to quadruple output in China.

Component sales to Asia grew 30 percent in November.

Japanese companies like Toshiba Corp. and NEC Corp. supply many of the microchips, display screens and other components used in popular consumer electronic goods ranging from digital cameras to color-screen mobile phones and compact disc players.

Many of these are assembled in China and Southeast Asia to take advantage of lower labor costs.

(AP, Reuters)