Exports in June rose 27.7 percent from a year earlier to ¥5.866 trillion, marking the seventh straight month of increase, although the rate of growth narrowed, Finance Ministry data showed Monday.
Exports for the first half of 2010 came to ¥33.097 trillion, up 37.9 percent from a year earlier, increasing for the first time in four half-year periods, according to the ministry's preliminary report.
Although exports continued to grow, a ministry official warned that the pace of expansion could be slowing down, citing the month's seasonally adjusted data, which declined for the second straight month.
"Given that exports are the sole driver of Japan's moderate economic recovery, the expansion is poised to slow in the third and the four quarters," said Yoshiki Shinke, a senior economist at Dai-ichi Life Research. "The yen's gain is also posing a threat to exporters' profits."
The yen gained 7 percent versus the dollar and 11 percent per euro in the past three months.
"The yen has appreciated too much," Koji Miyahara, chairman of shipping company Nippon Yusen K.K., said last week. "I'm hoping the yen will depreciate to a range of 95 to 100 to the dollar as soon as possible."
Exporters' currency woes are in contrast with their rivals in South Korea, where a weaker won helped Samsung Electronics Co. and Hynix Semiconductor Inc. post record earnings in the second quarter.
In June, Japan's trade surplus totaled ¥686.96 billion, up 41.1 percent year on year, logging the 15th consecutive month of surplus.
Exports to the United States were up 21.1 percent to ¥914.48 billion on the back of solid demand for automobiles and related components.
Those to Europe grew 9.0 percent to ¥611.22 billion.
Exports to Asia rose 31.7 percent to ¥3.301 trillion, but the pace of growth has been narrowing since earlier this year.
Japan enjoyed a 22.0 percent rise in exports to China in June, but its trade balance with the country suffered a deficit of ¥45.93 billion.
In the January-June period, the trade surplus came to ¥3.401 trillion, rising for the second consecutive half-year period.
In trade with Asia, the surplus hit a record ¥5.218 trillion, up 179.8 percent from the same period a year earlier, with exports to the region also climbing 46.4 percent, the fastest pace on record.
The deficit with China in the six-month period amounted to ¥140.73 billion, the smallest since the first half of 1993 and down 84.5 percent year on year.
Exports to the United States surged 29.0 percent to ¥4.961 trillion, bringing Japan's trade surplus with the country to ¥1.965 trillion, up 75.8 percent.
Exports to Europe rose 17.2 percent to ¥3.715 trillion.
The figures are measured on a customs-cleared basis before adjustments for seasonal factors.
Nomura goes 'neutral' BLOOMBERG Nomura Holdings Inc. cut its recommendation on Japanese shares to "neutral," citing a weaker profit outlook and slower economic growth prospects.
"The recovery in Japanese earnings is already beginning to lose momentum," Nomura analysts including Ian Scott wrote in a report dated Friday. The nation's largest brokerage on Monday also downgraded its forecast for economic growth as the strengthening yen threatens the export-fueled rebound.
The Nikkei 225 stock average has slid 14 percent this fiscal year on concern the European debt crisis will reduce earnings for Japanese exporters.
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