Asian demand powers Japanese exports for sixth straight month

Japan's exports rose for a sixth straight month, data showed, pointing to resilient global demand, although industrial supply chain disruptions driven by the Middle East conflict loom as a risk to the world's fourth-largest economy.

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The oil shock triggered by US-Israeli strikes on Iran has rattled governments and central bankers worried about the hit to economic growth.

In February, however, Japan continued to benefit from strong overseas orders. Total exports by value rose 4.2% year-on-year last month, data showed, exceeding a median market forecast for a 1.6% increase thanks to solid demand in Asia, although the shipments volume dipped 0.5%.

The challenge facing policymakers in Japan, and their counterparts globally, is that the Middle East war has dramatically shifted the risk profile for business, consumers and overall growth.

Japanese industries rely heavily on imports of energy to power the nation's economy, so the disruptions for oil and other materials, if prolonged, "could eventually drag down Japanese exports," said Koki Akimoto, economist at Daiwa Institute of Research.

With some Japanese chemical manufacturers already beginning to cut output due to limited supplies of naphtha, other industries could eventually be affected with a lag of a few months, he said.

Akimoto said the war could weigh on shipments of Japanese cars to the Middle East in the coming months.