Japan’s exports rise first time in 15 months on Asian demand

Japan's exports rose for the first time since the collapse of Lehman Brothers Holdings Inc 15 months ago, which, according to analysts, points to a recovering Japanese economy post the recession.

Shipments out of the country rose 12.1 per cent in December from a year earlier, the finance ministry said in Tokyo on Tueday. Japanese manufacturers from Honda Motor Co to Fuji Xerox Co are benefiting on renewed demand from China and other emerging economies where gross domestic product expanded at the fastest pace since 2007 last quarter. Analysts say the booming trade with emerging economies could more than make up for the weak domestic demand pulled down by sagging wages and deflation.

Last month's improvement came as a result of a favourable year-on-year comparison as in December 2008 shipments abroad had plummeted 35 per cent following the global trade chill that set in the aftermath of Lehman Brothers' collapse in September.

Exporters are in the forefront in powering the recovery even as prime minister Yukio Hatoyama is left with few options on spurring spending on the domestic front due to the burgeoning debt burden. Standard & Poor's on Tuesday lowered outlook on Japan's AA credit rating, saying the government lacked a plan to control budget deficits.

According to finance minister Naoto Kan the government's mid-term fiscal strategy to be released by June would help shore up investors' confidence. He told parliament on Tuesday that the government needed to keep yields around the current level by maintaining markets' trust in the in the economy's fiscal health.

The resurgence in trade comes on rising demand from Asia which has seen shipments from Japan advance 31.2 per cent from a year earlier, the fastest since February 2000.