Tokyo. Japan’s exports in December rose from a year earlier for the first time since before the financial crisis hit, but a rising yen and a growing reliance on Chinese demand bodes ill as Beijing looks to tighten monetary policy.
The bigger-than-expected 12.1 percent rise in exports came largely thanks to a jump in demand from Asia, which took in more than half of Japan’s total exports in the month.
“As China tries to rein in overheating in the economy, export growth will probably slow down a bit,” said Hiroshi Watanabe, senior economist at Daiwa Institute of Research.
Still, Japan’s export strength — the benefits of which have had little impact on households or the domestic sector — looks likely to keep the economy on the path to recovery for now.
“Japan’s economic growth is likely to accelerate towards the end of this year, reducing the possibility of the BOJ taking further easing measures,” said Kyohei Morita, chief Japan economist at Barclays Capital.
“But given that the yen is likely to appreciate again on such factors as China’s possible tightening, the BOJ may be prompted to take steps to respond to market volatility.”
Meanwhile in Australia, the inflation rate increased in the fourth quarter of 2009, figures showed on Wednesday, exceeding forecasts and boosting the prospects of an interest rate rise next week.
The Consumer Price Index rose 0.5 percent in the three months to December from the previous quarter and the annual headline inflation rate was 2.1 percent — above the expected figures of 0.4 percent and 2.0 percent.
The central bank’s core measure of inflation — which strips out some of the more volatile prices — slowed to an average of 0.65 percent for the quarter, the Australian Bureau of Statistics said.
But it rose an average 3.4 percent from a year earlier, placing it outside the bank’s inflation target range of 2 percent to 3 percent and strengthening arguments for an interest rate rise.
Treasurer Wayne Swan said the figures showed that inflation had moderated significantly since 2008 due to the effects of the global downturn and that the economy was still not at full capacity.
