Japan exports rise in October as slump in U.S. sales eases

By Makiko Yamazaki

TOKYO (Reuters) -Japan's exports rose for a second straight month in October, government data showed on Friday, ​as the recent slump in U.S.-bound shipments eased.

The trade report ‌follows separate data this week that showed Japan's economy contracted for first time in six quarters in the ‌July-September period due to a hit to exports from U.S. tariffs.

Total exports by value rose 3.6% year-on-year in October, data showed, more than a median market forecast for a 1.1% increase and followed a 4.2% ⁠rise in September.

Exports to the ‌United States fell 3.1% from a year earlier, while those to China were up 2.1%.

Imports grew 0.7% ‍in October from a year earlier, compared with market forecasts for a 0.7% decrease.

As a result, Japan ran a trade deficit of 231.8 billion yen ($1.47 ​billion) last month, compared with a forecast deficit of 280.1 billion ‌yen.

The U.S. and Japan formalised a trade agreement in September that implemented a baseline 15% tariff on nearly all Japanese imports, versus an initial 27.5% on autos and 25% for most other goods.

That gave some relief to Japanese manufacturers, but analysts say U.S.-bound shipments are likely to remain lacklustre as Japanese ⁠automakers, which had initially absorbed the additional ​tariffs by cutting export prices, began to pass ​on the costs to U.S. consumers.

Growing signs of further weakness in the U.S. economy could also add to the pressure on ‍Japan's exporters, ⁠they say.

Relatively solid domestic demand was one of the bright spots in this week's soft third quarter GDP figures, backed by strong capital expenditure and resilient ⁠private consumption.

However, the fragile recovery in the world's fourth-largest economy could be further undermined ‌by a prolonged downturn in exports.

($1 = 157.4400 yen)

‌(Reporting by Makiko YamazakiEditing by Shri Navaratnam)

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