Monday, 11 December 2006

Chinese exports and inflation accelerate, Japanese consumer sentiment improves

The Chinese economy is supposed to be slowing, but sometimes it is hard to tell. Bloomberg reports the latest trade numbers:

China had its second-largest trade surplus ever in November after the pace of exports growth unexpectedly accelerated.

The gap narrowed to $22.9 billion from a record $23.8 billion in October, the Beijing-based customs bureau said today on its Web site, bringing the surplus for the first 11 months to $156.5 billion. The government indicated Dec. 7 that the gap may swell by almost two-thirds to a record $168 billion this year...

Exports surged 32.8 percent in November from a year earlier, the biggest increase in three months, to a record $95.9 billion, while imports gained 18.3 percent to $72.9 billion, today's statement said.

And China's inflation rate accelerated in November. Again from Bloomberg:

Inflation in China, the world's fastest-growing major economy, accelerated more than expected in November as food costs increased at the quickest pace in almost two years.

Consumer prices rose 1.9 percent from a year earlier, the National Bureau of Statistics said today. That was the biggest gain in 20 months, adjusted for distortions caused by the Lunar New Year holiday, and topped all estimates among 21 economists surveyed by Bloomberg News.

Chinese stocks and bonds rose as non-food inflation held at 1 percent, damping expectations that the central bank will respond by raising interest rates. The acceleration is "temporary" and the bank won't act unless inflation stays at this level for several months, Tang Xu, research head of the People's Bank of China, said in Beijing today.

Neighbouring Japan would probably be happy with such inflation rates, but at least consumer sentiment there improved in November. Kyodo/Yahoo! News reports:

Japanese consumer confidence rose in November from the previous month for the second consecutive month, prompting the government to upgrade its assessment on consumer sentiment for the first time in 11 months, the Cabinet Office said Monday.

The index of confidence among households with two or more people came to an unadjusted 48.7, up 0.5 point from October. The index also rose 0.5 point on a year-on-year basis.

But it was a weaker yen that pushed Japanese stocks up today. From Bloomberg:

Japanese stocks climbed to their highest in more than six weeks after the yen weakened against the dollar, boosting the value of exports. Toyota Motor Corp. and Komatsu Ltd. paced advances...

The Nikkei 225 Stock Average added 110.17, or 0.7 percent, to 16,527.99 in Tokyo. The broader Topix index rose 11.63 or 0.7 percent, to 1627.97. Both gauges closed at the highest since Oct. 27. Advancing stocks outnumbered declines by about three to one on the first section of the Tokyo Stock Exchange.

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