European economy stays robust, Japan posts trade surplus as yen weakens

German business confidence fell slightly in February, but other numbers from Europe are looking good. From Bloomberg:

German business confidence fell more than economists forecast in February, providing further evidence economic growth is slowing from the fastest pace in six years.

The Ifo institute's sentiment index, based on responses from 7,000 executives, declined to 107 from 107.9 in January. Economists expected a drop to 107.5, according to the median of 41 estimates in a Bloomberg News survey. The Munich-based institute's index reached 108.7 in December, the highest since records for a reunified Germany began in January 1991...

The economy expanded 0.9 percent in the last three months of the year, faster than the 0.6 percent forecast by economists and the 0.8 percent growth recorded in the third quarter...

French business confidence unexpectedly rose this month and business optimism in Italy and Belgium increased more than economists expected.

Industrial new orders grew nicely in December. From Eurostat:

The euro area (EA12) industrial new orders index increased by 2.8% in December 2006 compared to November 2006. The index grew by 1.1% in November but fell by 0.3% in October. EU25 new orders gained 2.7% in December 2006, after increases of 0.8% in November and 0.4% in October. Excluding ships, railway and aerospace equipment industrial new orders rose by 0.6% in the euro area and remained stable in the EU25 in December 2006.

And Reuters reports that UK fourth quarter GDP growth was strong.

The Office for National Statistics' second estimate for economic growth showed GDP up 0.8 percent in the last three months of 2006, the strongest rate since mid-2004, taking the annual rate to an unrevised 3.0 percent.

The Japanese economy has not been doing too badly recently either, thanks to strong export growth. From AFP/CNA:

Japan logged a trade surplus of 4.44 billion yen (37 million dollars) last month, much better than a deficit of 353.53 billion yen seen a year earlier, the finance ministry reported...

The solid start to 2007 was mainly due to robust exports to China, particularly strong shipments of computer equipment for video games ahead of the Lunar New Year holiday.

Overall exports rose 18.9 percent in January year-on-year to 5.953 trillion yen, the largest ever for January, the ministry said.

Imports gained 10.9 percent to almost 5.949 trillion yen as the weakness of the Japanese yen raised the cost of incoming shipments despite a drop in the volume of crude oil imports, it added.

And Japan's trade performance could be sustained if the yen stays weak. From Bloomberg:

Japan's currency fell to a record low versus the euro this week when it declined against the dollar, British pound and South African rand after central bank Governor Toshihiko Fukui reiterated in parliament his board will keep rates low for some time...

The yen fell 1.5 percent this week to 159.35 per euro at 4:12 p.m. in New York, and reached an all-time low of 159.65, from 156.89 on Feb. 16. It was the biggest loss since a 1.6 percent decline for the week ended Sept. 2, 2005.

Japan's yen is the worst performer compared with 16 most- active currencies in the past three months, dropping 3.9 percent against the dollar and 5.5 percent versus the euro.