In October, Japan’s exports rose at the fastest pace seen in three years and is seen to continue its increase as overseas demand for Japanese manufactured products picks up, this shown in the data from a Reuters survey. This trend should help eases concerns about the country’s economic recovery, although in tangible terms, Japan’s trade balance will most likely remain in the red as imports of fossil fuels increase to offset the mothballing of most of the country’s nuclear power plants.
“Exports did not do well in July-September, but an overseas recovery and a weak yen are supporting the outlook, so we expect exports to continue to rise,” economists at Dai-Ichi Life Research Institute said. The data shows exports rose 16.5 percent in October from a year earlier, according to a Reuters poll of 27 economists. This increase marks the fastest growth since July 2010, when exports jumped 23.5 percent from the previous year. Japan’s finance ministry is set to release official data on November 20. Although the country is still seeing a trade deficit – the consecutive 16th month of trade deficits – economic experts are still hopeful of a positive outlook to end the year.
Japan, the world’s third-biggest economy, saw slower growth in the period from July to September, the causes of this seen with the slowing of capital spending, personal consumption and exports. But growth is expected to rebound a bit radically as shoppers are expected to rush to spend before a national sales tax is increased to 8 percent from 5 percent in April, economists say. Abenomics, Prime Minister Shinzo Abe’s aggressive push towards economic recovery and the defeat of chronic deflation, are struggling to gain traction on key areas that would indicate longer-lasting changes to the economy, the most poignant of these being that the companies in Japan should be confident enough to increase employee wages. This will then give the citizens more confidence to spend and propel the economy forward.
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