TOKYO Japan's exports are forecast to have grown at their fastest annual pace in three years in August as a weaker yen increases competitiveness and global demand picks up, further evidence an economic recovery is establishing roots, a Reuters poll shows.
However, the trade deficit is expected to widen again due to rising imports of fossil fuels, with the weaker yen increasing their cost, as nuclear power plants across the country have been idled after the Fukushima disaster.
A jump in exports would be seen as further evidence that economic growth is shifting into a higher gear due to Prime Minister Shinzo Abe's agenda of fiscal spending and aggressive monetary stimulus to end 15 years of deflation.
"The global economy is recovering and this will drive gains in exports," said Hiroshi Miyazaki, senior economist at Mitsubishi UFJ Morgan Stanley Securities.
"The pace of growth in exports can be sustained. Fiscal and monetary policy will also continue to support the economy for the time being."
Exports are forecast to have grown 14.5 percent in August from a year earlier. That would be biggest increase since exports rose 15.5 percent in the year to August 2010.
Imports are forecast to have risen an annual 18.5 percent due to the rising costs of importing crude oil and liquefied natural gas.
As a result, the trade deficit is expected to widen to 1.1 trillion yen for the month.
The finance ministry will release the data on September 19.
The Bank of Japan and the government have upgraded their assessments of the economy this month as an improving labor market and gains in consumer spending are starting to encourage companies to increase capital expenditure.
(Reporting by Stanley White; Editing by John Mair)