Japanese exports to the United States fell in September from a year earlier at the fastest pace in four years but overall exports rose, pushing the trade surplus up to a record high.
The data showed that firm shipments to China, the rest of Asia and Europe continued to underpin corporate activity, but it did little to alter dominant market views that the Bank of Japan will go slow in raising interest rates.
Exports to the United States, one of Japan's biggest markets, -- fell 9.2 percent from a year earlier, the biggest drop since November 2003, Ministry of Finance data showed on Wednesday.
"We can clearly see the impact of U.S. subprime woes on exports to the United States," said Takeshi Minami, chief economist at Norinchukin Research Institute. "U.S.-bound shipments may continue to fall at the pace seen in September in the coming months.
"Export growth is slowing overall but in volume terms it is holding up well, suggesting that the fall in U.S.-bound exports is being offset by strength in shipments to other parts of the globe like East Asia," he said.
Overall exports rose 6.5 percent in value terms, slowing from the previous month's 14.5 percent increase.
Financial markets did not react much to the data.
Imports shrank 3.2 percent partly on falling imports of crude oil, confounding a consensus forecast of a 2.0 percent increase.
As a result, the trade surplus expanded by 62.7 percent to a record 1.6378 trillion yen ($14.3 billion), compared with economists' median forecast for a 47.1 percent rise to 1.481 trillion yen.
Exports to the United States have been bumpy in the past several months, but brisk exports to the rest of the world have supported overall export growth in line with the BOJ's economic scenario.
Lingering uncertainty over the outlook for global economic and market conditions have heightened expectations that the BOJ will hold off on raising interest rates until early next year.
The central bank has kept monetary policy on hold since raising the key policy rate by a quarter-point to 0.5 percent in February, which was the first rate hike since July 2006.
Japan's economy contracted 0.3 percent in April-June because of a slump in capital spending, but analysts expect exports to help boost growth in the July-September quarter.