Exports, the engine that drove almost all of Japan's third- quarter expansion, rose 6.9 percent from a year earlier, after climbing 9.7 percent the previous month, the Finance Ministry said today in Tokyo. The median estimate of 21 economists surveyed by Bloomberg News was for an 8 percent gain.
Today's numbers suggest that record exports to Asia may fail to make up for slowing shipments to the U.S., where Toyota Motor Corp. and Sony Corp. get about a third of their sales. A steeper U.S. slowdown could also stifle demand in Asia.
Imports rose 12.1 percent in December to a record, the ministry said, causing the trade surplus to narrow to 877.9 billion yen ($8.2 billion). The median forecast of 38 economists was for the surplus to shrink to 946.5 billion yen.
Prospects of slower U.S. growth are causing the yen to surge, clouding the outlook for the nation's exporters. The yen has gained 5 percent against the dollar this year, cutting the value of overseas sales.
Half of Japan's shipments overseas are settled in U.S. dollars even though the country is relying more on China and other emerging markets for trade.
The yen is approaching the point at which companies say they won't be profitable. Exporters say they can make money as long as the yen is weaker than 106.06 against the dollar. Japan's currency is already 8 percent higher than the level the nation's largest exporters based their profit forecasts on for the year ending March.
China, including Hong Kong, overtook the U.S. as Japan's largest export market in 2007, today's report showed. Exports to the two markets rose to 17.4 trillion yen. Shipments to the U.S. fell for the first time in four years to 16.9 trillion yen.