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Japan and Taiwan Exports Improve from May to June
Japan's and Taiwan's exports declined at slower paces in June 2009, compared to the last eight to twelve months. The fall in Japanese overseas sales went from 40.9 percent in May to 35.7 percent in June compared to the same time in 2008, reported the Finance Ministry in Tokyo. The Ministry of Economic Affairs in Taiwan said that exports in May had fallen 20.14 percent and the decline slowed in June, to total about 10.91 percent fall in exports compared to 2008. The slowing decline of exports means that the economy in the U.S and Europe are perking up, said Tony Phoo, an economist at Standard Chartered Bank in Taipei. Exports are always linked to the exchange rate of a country's currency. The yen weakened against the dollar, going from 94.30 to 93.59, as signs of improvement in exports gave investors incentives to buy riskier assets abroad. Exports are important for the two countries, since their significant growth before the recession was due to fast increases in exports. Chief statistician, Huang Ji-Shih from the Ministry of Economic Affairs expects Taiwan's exports to begin rising in the last three months of 2009.
Japan's exports fell in June at the slowest pace this year and orders for Taiwanese shipments declined the least in eight months, adding to evidence that Asia's economies are on the road to recovery. Japanese overseas sales dropped 35.7 percent from a year earlier, easing from a 40.9 percent decline in May, the Finance Ministry said in Tokyo. Orders for Taiwan exports, an indication of shipments in one to three months, fell 10.91 percent from a year earlier, easing from a 20.14 percent retreat in the previous month, the Ministry of Economic Affairs said in Taipei. Worldwide stimulus worth $2.2 trillion has stabilized demand and boosted shipments for exporters including Komatsu Ltd. and Taiwan Semiconductor Manufacturing Co. East Asia's rebound from the worst global recession since the Great Depression may be "V-shaped," the Asian Development Bank said today. "The slowdown in the exports decline is signaling a potential pick-up in the U.S. and Europe," said Tony Phoo, an economist at Standard Chartered Bank in Taipei. "China is driving the pickup in demand." The Nikkei 225 Stock Average rose 0.7 percent at the close in Tokyo, taking its gains to 39 percent since reaching a 26- year low on March 10. The yen weakened to 94.30 per dollar from 93.59 before the report as the improvement in exports encouraged investors to buy higher-yielding assets abroad. Taiwan's benchmark Taiex index is the world's ninth best performer this year, advancing 52 percent. Taiwan's dollar was little changed at NT$32.985 against the U.S. currency. Auto Parts, Chips Japan's trade slump eased in all of the country's main markets. Exports to China fell 23.7 percent from a year earlier, the smallest drop since October, led by improving demand for steel, auto parts and chips. Shipments to the U.S. declined 37.6 percent, the least since December, and sales to Europe slid 41.4 percent, also the best this year. "You have to search to find either a region or a product that isn't recovering," said Richard Jerram, chief economist at Macquarie Securities Ltd. in Tokyo. "What's happening is going to be positive for consumer demand and positive for corporate investment." In Singapore, exports dropped the least in nine months in June, while South Korea's shipments fell at the slowest pace in eight months. The Bank of Japan last week raised its assessment of the economy for a third month, citing rebounds in trade and factory production as the reasons that "economic conditions have stopped worsening." Trade accounted for most of Japan's growth during the country's most recent expansion, a six-year stretch that ended in October 2007. China, Hong Kong The value of Taiwan's export orders rose to $27.94 billion last month from $25.17 billion in May, today's report showed. In the first half of the year, export orders fell 23.28 percent from a year earlier, compared with a 25.85 percent drop in the January-to-May period. Huang Ji-shih, chief statistician at the Ministry of Economic Affairs, expects export orders to start rising again in the fourth quarter. Export orders to China and Hong Kong from the island combined fell 10.49 percent last month, compared with a 17.65 percent drop in May. Analysts surveyed by Bloomberg predict the rebound in Japanese exports helped the world's second-largest economy expand an annualized 2.4 percent in the three months ended June 30. That would end four consecutive quarters of negative growth that shrunk gross domestic product down to its 2003 size. 'Driving Force' China's 4 trillion yuan ($586 billion) stimulus package is feeding demand for Japan's heavy equipment, autos and materials. The market this year surpassed the U.S. as Japan's biggest. "There's no doubt China has been a driving force for Japan's exports," said Masamichi Adachi, senior economist at JPMorgan Chase & Co. in Tokyo. "Manufacturers will probably continue to increase production amid the improvement in exports, and that's good for the economic outlook." Komatsu's sales of construction machinery in China will probably jump about 40 percent this month, Chairman Masahiro Sakane said today at a business conference. Japan's biggest maker of earthmovers expects China to grow to about 15 percent of total sales this business year, from 10 percent in 2008. Taiwan Semiconductor, the world's biggest made-to-order chipmaker, said sales in June were 5.3 percent higher than in May. The company is a bellwether for the electronics industry because it makes chips for products ranging from mobile phones to games consoles.read source article