Japanese trade surplus narrowed in October as import costs continued to swell on high oil prices, offsetting a mild recovery in exports, government data showed on Thursday.
But economists were encouraged by rising exports to China, which hit a record high in value terms, and expected the firmness in exports to continue supporting Japan's steady recovery.
The trade surplus fell 28.8 percent in October from the same month a year earlier to 822.1 billion yen ($6.93 billion), the Ministry of Finance data showed.
The decline in the surplus, the seventh straight monthly year-on-year fall, was steeper than the market consensus forecast for a year-on-year drop of 23.7 percent and a surplus of 880.4 billion yen.
Imports jumped in October, driven by a 49.5 percent rise in the value of crude oil imports. Overall imports rose 17.8 percent to 5.09 trillion yen, compared with a median market forecast of an 18.5 percent rise. Japan's economy grew 0.4 percent in July-September, the fourth straight quarter of growth, but the expansion was underpinned by firm capital spending and personal consumption, while net exports - exports minus imports - were a slight drag on growth.
Exports in October rose 8.0 percent from a year earlier to 5.91 trillion yen, helped by higher exports of automobile and steel. But the gain fell short of forecasts in a Reuters poll that had centred on a year-on-year increase of 9.6 percent. Still, exports to China rose 12.8 percent to a record 831.9 billion yen. China, including Hong Kong, is now Japan's biggest trading partner and second-largest export destination after the United States.
Economists said exports could pick up more in the months ahead as the US and Chinese economies recover.