A shipping container enters Tokyo Bay.
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Japan’s exports in October far exceeded expectations, with shipments to Europe and Asia also showing solid growth, according to government data on Friday.
Exports rose 3.6% from a year earlier, compared with a 1.1% increase expected by economists polled by Reuters. However, it was lower than the 4.2% rise in September.
Exports to Asia rose 4.2% year over year, while shipments to Western Europe rose 8.8%, offsetting a 2.7% decline in shipments to North America as shipments of goods to the U.S. fell 3.1%.
Automobile shipments, Japan’s largest export to the United States, fell 7.5% from the same period last year, but this was slower than the 24.2% decline seen in the previous month.
The data comes as Japan is embroiled in a diplomatic spat with China, its largest trading partner, over Prime Minister Sanae Takaichi’s comments on Taiwan.
The trade impact of the dispute could be seen in next month’s data.
Mainland China has suspended imports of seafood from Japan, Asia Group said in a note on Wednesday. It also pointed out that Chinese social media shows that some Japanese brand stores in Shanghai and Beijing have been “voluntarily” closed for several days for “reasons known to everyone.”
Meanwhile, imports to the world’s fourth-largest economy rose by an unexpected 0.7%, contrary to expectations of a 0.7% decline in a Reuters poll.
Better-than-expected export data will be a welcome relief for Japan’s economy, which struggled in the third quarter. The country’s GDP contracted by 0.4% sequentially, with net exports pushing down the quarterly figure by 0.2 percentage points.
Japan also released consumer inflation data on Friday, with headline inflation now above the Bank of Japan’s 2% target for 43 consecutive months.
of Nikkei Stock Average Although it fell 2.38% after the data was released, Japan’s circle Against the dollar, it rose slightly to trade at 157.39.
Reuters reported that Japan’s Finance Minister Satsuki Katayama said, “I am wary of recent unilateral and rapid movements in the foreign exchange market,” hinting at the possibility of market intervention.
The dollar has appreciated 2.19% against the yen so far in November, but has risen 9.52% in the past six months, according to LSEG data.
However, Mithul Koteka, head of Asian foreign exchange and emerging markets macro strategy at Barclays, told CNBC’s “Squawk Box Asia” that intervention does not seem imminent.
“The problem facing Japanese officials is that we are still in a largely positive dollar environment, and as we all know, intervention doesn’t work well when the overall market movement is against you. It works better when the market movement is in your favor,” Koteka said.
However, he did not completely dismiss the possibility of intervention, saying: “It will be important that there is a focus on volatility. We’ve heard that from Japanese officials as well. So it’s not just the level, but also the pace of movement that could trigger intervention.”
