By Makiko Yamazaki
TOKYO (Reuters) -Japan's exports rose for a second straight month in October, government data showed on Friday, as the recent slump in U.S.-bound shipments eased.
The trade report follows
separate data this week that showed Japan's economy contracted for first time in six quarters in the July-September period due to a hit to exports from U.S. tariffs.
Total exports by value rose 3.6% year-on-year in October, data showed, more than a median market forecast for a 1.1% increase and followed a 4.2% rise in September.
Exports to the United States fell 3.1% from a year earlier, while those to China were up 2.1%.
Imports grew 0.7% in October from a year earlier, compared with market forecasts for a 0.7% decrease.
As a result, Japan ran a trade deficit of 231.8 billion yen ($1.47 billion) last month, compared with a forecast deficit of 280.1 billion yen.
The U.S. and Japan formalised a trade agreement in September that implemented a baseline 15% tariff on nearly all Japanese imports, versus an initial 27.5% on autos and 25% for most other goods.
That gave some relief to Japanese manufacturers, but analysts say U.S.-bound shipments are likely to remain lacklustre as Japanese automakers, which had initially absorbed the additional tariffs by cutting export prices, began to pass on the costs to U.S. consumers.
Growing signs of further weakness in the U.S. economy could also add to the pressure on Japan's exporters, they say.
Relatively solid domestic demand was one of the bright spots in this week's soft third quarter GDP figures, backed by strong capital expenditure and resilient private consumption.
However, the fragile recovery in the world's fourth-largest economy could be further undermined by a prolonged downturn in exports.
($1 = 157.4400 yen)
(Reporting by Makiko YamazakiEditing by Shri Navaratnam)
