Japan grows

Japan's export growth unexpectedly quickened in January, as rising demand for cars and steel from China and Russia made up for falling U.S. sales.

Exports, the engine that drove almost half of the economy's expansion last quarter, rose 7.7 percent, from December's 6.9 percent gain, the Finance Ministry said today in Tokyo. The median estimate of 18 economists surveyed by Bloomberg was for a 6.6 percent increase.

Shipments to Asia and Europe rose to records for the month, as growing consumer classes in China, India and Russia create new customers for exporters including Mitsubishi Motors Corp. and Matsushita Electric Industrial Co. Exports to the U.S. fell for a fifth month amid the worst housing slump in 26 years.

``The good news is the destinations for Japan's export products have become far more diversified,'' said Jan Lambregts, head of Asia research at Rabobank International in Hong Kong. The bad news is that ``a protracted U.S. recession would be much harder to shelter from.''

The yen was little changed, trading at 108.10 per dollar at 12:13 p.m. in Tokyo from 107.99 before the report was published.

The International Monetary Fund last month forecast emerging economies will expand 6.9 percent in 2008, compared with 1.5 percent growth in the U.S. China will expand 10 percent.

Waning demand in the U.S., the world's biggest economy, will eventually take its toll on the emerging markets where Japan ships about half its goods, Economic and Fiscal Policy Minister Hiroko Ota said last week.