UPDATE 2-Japan exports to US fall, trade surplus at record

(Adds details, economist comments)

By Tetsushi Kajimoto

TOKYO, Oct 24 (Reuters) - Japanese exports to the United States fell in September from a year earlier at their fastest pace in four years but overall exports rose, pushing the trade surplus to a record high, government figures showed on Wednesday.

Shipments to China, the rest of Asia and Europe underpinned Japan's rising surplus -- showing exports remain a main engine of the economy's growth.

But financial markets took the record surplus in their stride, with the focus stuck on the U.S. weakness and lingering jitters in global markets, which have pushed back expectations of an interest rate increase by the Bank of Japan (BOJ). FXNEWS <JP/>

Exports to the United States fell 9.2 percent from a year earlier, the biggest drop since November 2003, raising fears that subprime problems were taking a toll on Japan's major export destination.

"We can clearly see the impact of U.S. subprime woes on exports to the United States," said Takeshi Minami, chief economist at Norinchukin Research Institute.

"U.S.-bound shipments may continue to fall at the pace seen in September in the coming months."

The main culprit for the fall in U.S.-bound exports was auto shipments, which fell 15.2 percent from a year earlier, and construction machinery for housing, an official of the Ministry of Finance said.