Japan Inc: Yes, Decoupling is Possible

Just out is news that Japanese exports for the month of February increased by 8.7%, somewhat assuaging those concerned about Nihon's exports slowing down in line with the US economy entering recession land or somewhere thereabouts. Combined with healthy export growth in January as well, this may be a good portent. Indeed, strong demand growth from LDCs is making up for the subprime-induced coma of the American economy. USA, who needs ye? From Bloomberg:

Japan's export growth accelerated in February as demand from emerging markets helped automakers ride out the U.S. slump.

Exports, which contributed more than half of the economy's expansion last quarter, climbed 8.7 percent from a year earlier after increasing 7.6 percent in January, the Finance Ministry said today in Tokyo. The median estimate of 19 economists surveyed by Bloomberg News was for a 7.5 percent gain.

Hino Motors Ltd. and Honda Motor Co. are relying on consumers in emerging economies to make up for waning demand in the U.S., Japan's largest market. Exports may cool this year as the U.S. slowdown spreads around the world and the yen's surge against the dollar hurts exporters' profits.

``Global demand so far has held up far better than people have hoped,'' said David Cohen, director of Asian economic forecasting at Action Economics in Singapore. ``We've got the Chinese and the Russians to thank for that. They've got money and they're spending it.''

Imports increased 10.1 percent, and the trade surplus widened 0.9 percent to 969.9 billion yen ($9.7 billion), the ministry said...

Japan's sales to Russia doubled in the past two years. Those to China expanded 45 percent. That growth has reduced the importance of the U.S., which accounted for only 20 percent of total exports last year, compared with about 30 percent in 2000.