Not helping US domestic demand…

Japan Export Gains Offer Growth Momentum as Sales-Tax Rise Looms

By Andy Sharp & Toru Fujioka

September 19 (Bloomberg) — Japan’s exports rose the most since 2010 in August, boosting Prime Minister Shinzo Abe’s growth drive even as rising energy costs extended the streak of trade deficits to the longest since 1980.

Exports rose 14.7 percent from a year earlier, the sixth straight advance, a Finance Ministry report showed in Tokyo, in line with the median estimate of analysts surveyed by Bloomberg News. The trade gap was 960.3 billion yen ($9.8 billion).

A surge in exports to the U.S., along with a rebound in shipments to China in the wake of bilateral tensions last year, are offering momentum to Japan as it prepares for the first sales-tax increase since 1997. Rising competitiveness from the yen’s 20 percent drop against the dollar the past year also has helped manufacturers including Panasonic Corp. (6752) as they cope with higher energy costs with the nation’s nuclear industry shuttered.

“We are finally seeing a clear recovery in exports, led by a weak yen and a moderate global recovery,” said Takeshi Minami, chief economist at Norinchukin Research Institute Co. in Tokyo. “My biggest concern is the planned sales-tax increase next year. A recovery in exports will help cushion the impact but a higher levy could still be a big drag on the economy, while risks remain in Europe and emerging markets.”