By Shino Yuasa, The Associated Press

TOKYO - Japanese exports in October fell by the smallest amount in a year, the government said Wednesday, as stimulus spending lifted demand - particularly from China and the rest of Asia.

But economists warned that Japan's export-reliant economy remains weak and global demand for its cars, consumer gadgets and other mainstay products could slump again as the effects of government stimulus measures fade.

"A global economic recovery is sustained by worldwide stimulus measures, and the recovery remains fragile. Once those stimulus measures are gone, global demand could cool down again," said Hiroshi Watanabe, an economist at Daiwa Institute of Research.

Exports dropped 23.2 per cent from a year earlier to 5.3 trillion yen ($60 billion), the 13th straight decline, the Ministry of Finance said. In September, exports fell 30.6 per cent. Back in February, they plunged by nearly half.

Shipments of automobiles were down 37.2 per cent and exports of steel were off 38 per cent - both an improvement from previous months yet also showing that big Japanese employers like Toyota Motor Corp. and Nippon Steel Corp. still face trying times.

Imports in October fell 35.6 per cent 4.5 trillion yen, resulting in a trade surplus of 807.1 billion yen, the ministry said.

Japan's economy, the world's second-largest, appears to be at a critical juncture as policymakers try to sustain a recovery from its worst recession since World War II.

Last week, figures showed the economy expanded at an annualized pace of 4.8 per cent in the third quarter, the strongest growth in more than two years. Industrial production has also been recovering after plunging earlier this year in the wake of the global financial crisis.

But Japan's jobless rate is still a high 5.3 per cent and salaries and prices are falling. Such deflation may sound positive, but it can erode corporate profits, cause companies to cut wages and also prompt consumers to hold off on purchases on hopes that prices will fall further.

Exports to the rest of Asia, while still down, showed the biggest improvement. They fell 15 per cent from a year earlier - the smallest drop since last October - after dropping 30 to 40 per cent during the first half of the year. Shipments to China fell 14.3 per cent.

Asia has become increasingly vital to Japan's economy. Exports to the rest of Asia totalled 2.88 trillion yen - more than those to the U.S. (874 billion yen) and European Union (668 billion yen) combined.

Shipments to the United States declined 27.6 per cent in October, down for the 26th month, while those to the European Union sank 29 per cent year-on-year.