Mumbai: Japan's trade surplus rose 7.7 per cent to $8.3 billion (¥979.6 billion) in February compared with the same month a year earlier, the ministry of finance said in Tokyo. Exports climbed 9.7 per cent over the same period.

The widening of trade surplus was aided by a rise in exports to China and the US, helping the world's second largest economy stretch its longest post-war expansion further.

Japan's recent growth has been fuelled by a rising demand for the nation's cars and electronics overseas, and the Bank of Japan said.

Exports helped the economy expand at the fastest pace in three years. Higher sales of Honda Motor Co.'s Accord sedans and Matsushita Electric Industrial Co.'s plasma-screen televisions helped exports surge to a record for the month Japan's exports to the US rose seven per cent, against 5.5 per cent in January thanks to demand for Japanese automobiles while exports to China rose 9.2 per cent. Shipments to the European Union grew 16.6 per cent, faster than the 12.9 per cent in January.

Japan's second-largest carmaker, Honda, sold 45 per cent more vehicles in China last month. The automaker sold 56,368 automobiles in China in the first two months of 2007, up 50 per cent from the same period last year.

Consumer electronics giant Matsushita reported a 60 per cent surge in profit for the quarter ended December 31, helped by a weaker currency and higher demand in the US and Europe for its plasma televisions.

Import growth slowed to 10.1 per cent from 11.1 per cent a month earlier, as oil costs declined. The yen was little changed at 117.48 per dollar as of 2:38 p.m. in Tokyo from 117.49 in the morning trade.

A Japanese government report, meanwhile, said business sentiment among Japan's largest manufacturers fell to 0.1 point this quarter from 7.1 in the previous three months, reflecting concern that export demand may slow.

Exports and corporate spending on factories and equipment are driving the country's economic expansion even as slow wage growth is hampering private consumption at home.

Japan's economy grew at an annual 5.5 per cent pace last quarter as businesses continued to invest amidst the fastest0ever fall in wages in more than two years in January.