Japanese exports grew more than expected in May, a boon for Japan's export-led economic growth that strengthened expectations of a Bank of Japan rate hike some time in the July-September quarter, most likely in August.
Brisk exports to Asia and Europe made up for sluggish shipments to the United States. Imports also rose more than expected as a cheaper yen inflated the country's import bills to a record high, leading to a slightly lower-than-expected trade surplus.
"As a whole, exports remain firm, reflecting around 5 percent growth in the global economy as forecast by many international institutions," said Takeshi Minami, chief economist at Norinchukin Research Institute. Japan's exports rose 15.1 percent from a year earlier to 6.57 trillion yen ($53.3 billion), beating economists' median forecast of an 11.1 percent rise, customs-cleared data from the Ministry of Finance showed.
Exports to the United States, Japan's largest export destination, remained a drag. They rose just 0.4 percent from a year earlier to 1.30 trillion yen, having fallen for the first time in more than two years in April, although that could be partly because Toyota Motor Corp shifted some of its car production to the United States from Japan in April.
However, exports to other areas were robust. Exports to Asia grew 18.6 percent to 3.23 trillion yen in May, and those to China climbed 24.5 percent to 1.03 trillion yen. EU-bound exports rose 17.9 percent to 971 billion yen, with shipments of automobiles leading the way, in part helped by a weaker yen. The yen's trade-weighted real effective rate fell to a 22-year low in May.
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