TOKYO, March 16 Reuters Japan posted two straight years of export gains, led by solid U.S.bound shipments of cars, although expectations of a strong recovery in demand are quickly fading amid global monetary tightening and worries about banks worldwide.

The world39;s thirdbiggest economy has struggled to make a solid postCOVID recovery, undermined by lacklustre household consumption and a global slowdown. Slowing shipments to China have also shattered policymakers39; hopes for a quick rebound from the pandemic doldrums.

The trade data by the Ministry of Finance MOF showed on Thursday Japan39;s exports grew 6.5 yearonyear in February, undershooting a 7.1 increase expected by economists in a Reuters poll. It followed a 3.5 rise in the previous month.

Imports rose 8.3, versus the median estimate for a 12.2 increase, resulting in a trade deficit of 897.7 billion yen 6.75 billion.

It marked the biggest trade shortfall for the month of February.

The Japanese economy narrowly averted a recession in the final months of 2022, as consumption remained weak while exports were hampered by slowdown in global growth.

Monetary tightening across the world, supply chain constraints and the Ukraine war have undercut Japan39;s recovery.

In a glimmer of hope for a potential pickup in private demand, the leading gauge of business investment showed a strong reading on Thursday.

Core machinery orders rose 9.5 in January from a month earlier, the biggest monthly hike in more than two…