Overseas shipments dropped 2.7 percent from a year earlier, the finance ministry said today in Tokyo. The median forecast of 28 economists surveyed by Bloomberg News was for a 6.5 percent decrease. Imports rose a more-than-estimated 9.2 percent, leaving a surplus of 32.9 billion yen ($395 million).

The yen’s decline of about 7 percent against the dollar since the Bank of Japan expanded monetary stimulus on Feb. 14 is making exports more competitive for companies such as Sony Corp. (6758) The Cabinet Office said yesterday that the economy is picking up “slowly” after the earthquake and tsunami that devastated northeastern regions in March last year.

Today’s figures indicate that “a recovery in exports will likely be sustainable,” said Kohei Okazaki, an economist at Nomura Securities Co. in Tokyo. “Japan’s economy will likely return to growth this quarter and maintain a good pace of growth in the following quarters.

Retail sales in the U.S. rose the most in five months in February, adding to signs of improvements in global demand.

The yen rose 0.3 percent against the dollar immediately after the data before surrendering gains to trade little changed at 83.42 as of 9:51 a.m. in Tokyo. Analysts’ median estimate was for a 120 billion yen trade deficit.

Currency Slides

Japan’s currency has fallen from a post World War II high of 75.35 per dollar in October. The currency extended declines after Bank of Japan (8301) Governor Masaaki Shirakawa and his board members expanded bond purchases by 10 trillion yen last month and set a 1 percent inflation goal.

The central bank held off from expanding asset purchases this month as it monitored improvements. In yesterday’s report, the government said that private consumption is ‘‘firm” and capital spending is “picking up.”

The import bill is being swelled by energy costs because of rising oil prices, a weaker yen and nuclear plant shutdowns that followed last year’s Fukushima reactor meltdowns. Imports of liquefied natural gas surged 53.8 percent from a year earlier, today’s report showed.

Power shortages have been a particular challenge for the western region of Kansai, which accounts for a fifth of Japan’s economy, where all nuclear plants have been shut down. Power supply may be up to 25 percent less than peak summer demand if plants are not restarted, according to Kansai Electric Power Co.

Osaka Mayor Toru Hashimoto is weighing a proposal to use his city’s status as the largest shareholder in Kansai Electric to call on the utility to abandon its use of nuclear power at ashareholders’ meeting in June, the Wall Street Journal reported this week.

To contact the reporter on this story: Andy Sharp in Tokyo at asharp5@bloomberg.net

To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net

http://www.bloomberg.com/news/2012-03-22/japan-s-higher-than-forecast-february-exports-trigger-yen-gain.html

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