Japan's exports rose at the fastest pace in seven months in September, easing fears that the country's main growth engine is sputtering.
Exports grew 6.9 percent on an annual basis, data from the Ministry of Finance showed Wednesday, a tad higher than the 6.8 percent forecast from Reuters, and following the 1.3 percent decline in August.
Imports, meanwhile, rose 6.2 percent from the year-ago period, beating expectations of a 3 percent climb and after falling 1.5 percent in August. This brought trade deficit to 958.3 billion yen, larger than expectations for 777 billion yen deficit.
The outlook for Japanese exports has been in focus after momentum faltered in recent months despite a weak yen, which traditionally makes it more attractive for overseas firms to buy goods from Japan.
Concerns have been further amplified by a slowdown in China, war in the Middle East and the spread of the Ebola virus, which could mean exports may struggle to accelerate further.
"I actually see lots of bright points from the trade data," said Takuji Okubo, principal & chief economist at Japan Macro Advisors. "I think Japanese exporters have been almost dismissed [in that] they can't get exports up despite the weak yen but I think we're now seeing the surge in exports and of course this has to go on to convince markets that exporters are competitive."
The strong imports figures are also significant, Okubo added, as they imply consumers are shaking off the effects of the nation-wide hike in consumption tax, which was raised to 8 percent from 5 percent in April.
"That implies that Japan's domestic market is starting to recover. That's positive [since] people have been saying negative things about Japan after the sales tax hike so it seems that Japanese demand is recovering," he said.