- Japan's export growth picked up in November for the first time in nine months due chiefly to the yen's pullback from 15-year highs, but analysts say signs of softening overseas demand cloud the outlook.
Uncertainties about overseas economies bode ill for the Japanese government, whose fiscal policy options are limited due to a self-imposed cap on new borrowing for the year starting next April. The government is set to compile the 2011/12 budget this week.
Economists expect export growth to resume slowing towards the first quarter of next year but to regain strength later on demand from emerging economies.
This outlook is not assured, however, given a weak U.S. job market, Europe's debt problems and China's policy tightening aimed at staving off potential asset price bubbles.
"As the global economy is clearly slowing, although it is not deteriorating, Japan's annual export growth may turn flat in January-March, which will weigh on the economy's growth," said Takeshi Minami, chief economist at Norinchukin Research Institute in Tokyo.
"But even if the Japanese economy's slowdown and downside risks become more evident early next year, the government could hardly do anything about it, with little room left to boost fiscal spending."
http://www.reuters.com/article/idUSTOE6BL00G20101222
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