TOKYO — Japanese exports rose in July at the fastest annual pace in nearly three years, Ministry of Finance data released Monday showed, as the benefits of a weak yen started to take hold and brisk sales of cars and electronics to the United States, Asia and Europe showed a recovery in overseas demand.

The trade deficit in July was still one of Japan’s biggest, at ¥1.02 trillion, or $10.4 billion, as the weak yen and rising oil prices made energy imports more expensive, which may drag on corporate profits ahead.

Analysts expect Japan to maintain a steady recovery, although some warn of risks like the continued slowdown in China, Japan’s biggest trading partner.

“As a trend, exports are recovering and will keep growing because the positive effect of the weak yen will strengthen in coming months,” said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute in Tokyo. “Hopefully that will offset risks, notably the possibility that China’s economic recovery will remain weak.”

The 12.2 percent increase in exports compared with July last year was less than a median estimate for a 13.1 percent increase in a poll of analysts by Reuters, but was the biggest gain since December 2010.

Exports to the United States, Asia and Europe all accelerated. Export volume also rose for the first time in more than a year, offering more evidence that overseas demand could strengthen further.

“We expect exports to continue to recover,” said Hiroaki Muto, senior economist at Sumitomo Mitsui Asset Management in Tokyo. “The details are encouraging because you can see that exports to Japan’s main markets are bouncing back.”

The United States urged Japan on Monday to open its auto and insurance markets more to foreign companies as the two countries pursue bilateral talks linked to a broader international trade agreement.

The United States hopes to make a proposal to Japan on its trade barriers in September, said Michael Froman, the U.S. trade representative, as part of a drive to reach a conclusion on the trade initiative, the Trans-Pacific Partnership, by the end of the year.

Reports that the Japanese government is willing to phase out tariffs on 85 percent of goods under negotiations for the agreement suggest a “good initial step,” Mr. Froman said.

“The foreign share of the Japanese auto market is about 6 percent,” Mr. Froman said in Tokyo. “The foreign share of the U.S. auto market is closer to 40 percent. I don’t think there is any question that the U.S. market is quite open.”

Article source: http://www.nytimes.com/2013/08/20/business/global/weak-yen-works-for-japan-as-exports-rise.html?partner=rss&emc=rss