TOKYO - JAPAN'S exports grew at the slowest pace in two years last month as shipments to the United States fell, a signal that the nation's economic expansion may cool because of waning demand in its largest market.
Exports rose by 6.5 per cent from a year earlier, according to government data released yesterday, less than the 8.1 per cent median forecast of 10 economists surveyed by Bloomberg News and 14.5 per cent in August.
Imports declined for the first time in more than three years, helping the trade surplus to widen to a record. Shipments to the US fell by 9.2 per cent, the biggest drop in four years, the Japan's Finance Ministry said, as a housing recession led to a fall in demand for construction equipment.
In the US last week, Caterpillar, the world's largest maker of earth-moving equipment, lowered its full-year profit forecast because the housing recession reduced sales in North America.
That could also affect earnings at Tokyo-based Komatsu, the second-biggest such company, which gets about a quarter of its sales in the Americas. Shipments to China, Europe and Asia, which propped up export growth in the past six months, expanded at a slower pace.
'The outlook for exports to Asia warrants caution' because the US slowdown may reduce demand for Japanese goods shipped within the region that are destined for the US, said Mr Yoshimasa Maruyama, senior economist at BNP Paribas Securities Japan.
'Recent gains in the yen are also bad news for Japanese exporters,'he added.
Japan's currency has gained more than 2 per cent against the US dollar in the past two weeks on renewed concern that the American housing slump will slow global growth.
Japan needs export growth to ensure that the economy rebounds from a second-quarter contraction as falling wages keep the lid on spending by consumers at home
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