Business

Japanese exports rise by most since 2010

  • 19 June 2013
  • From the section Business
Cargo terminal in Tokyo
The weaker yen has boosted exports but also made imports more expensive

Japanese exports rose in May at the fastest annual rate since 2010 as the yen weakened, providing a boost to Prime Minister Shinzo Abe's plan to revive the economy.

Shipments shot up 10.1% from the previous year, data showed, to earn 5.8tn yen ($60.5bn; £39bn).

The yen has weakened significantly since last year, despite recent gains, helping exporters.

A strong yen makes their goods expensive overseas and cuts profits.

"This (export data) shows Japanese companies are increasingly in better shape," said Junko Nishioka, chief economist at RBS Securities Japan. "Their profitability is also rising these days, meaning they are becoming more resilient to potential external shocks."

Shipments picked up in key markets, with exports to the US rising 16.3% from a year earlier. Shipments to China increased by 8.3%.

The yen has lost more than a fifth of its value against the US dollar in the 12 months to May. Even though it has gained some strength in recent days, it is still 17% below where it was a year ago and currently trades at about 95 yen to the dollar.

Many Japanese firms have said this is the right level for their exports to recover.

However, the weak yen has also made imports more expensive.

Imports in May were up 10% from a year ago, data showed on Wednesday, taking the trade deficit to 993.9bn yen.

It marks the 11th straight month that Japan has posted a deficit as energy import costs continue to be high after the country's nuclear plants were shut down.

Policymakers have embarked on a stimulus effort to pull Japan out of nearly two decades of economic stagnation.

The improved data comes after Mr Abe declared that his aggressive policies aimed at sparking growth had won support from the G8 leaders on Tuesday.

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