A surge in car shipments spurred Japanese exports to their biggest annual increase in three years in October.

This suggests a gradual pick up in global demand will help underwrite a sustainable recovery in the world's third-largest economy.

The 18.6% increase in exports in the year to October was much better than the median market forecast for a 16.5% rise and accelerated from a 11.5% gain in September, data from the Ministry of Finance showed.

Significantly, exports also rebounded in volume terms, rising 4.4% from a year earlier, in a sign the global economy is gradually recovering mainly on strength in advanced nations.

Sluggish exports have been a source of concern for Japanese policymakers as shipment volume has struggled to pick up despite a weak yen this year due to slowdown in emerging economies.

While the yen has fallen around 14% against the dollar in 2013, exports growth has largely disappointed early expectations.

The Japanese economy has been humming along nicely this year on the back of Prime Minister Shinzo Abe's massive monetary and fiscal expansionary policies, dubbed Abenomics. But, headwinds from weak capital spending and depressed global demand have somewhat clouded the outlook.

The October data should provide some relief for the government, which is hoping a recovery in overseas demand will cushion the blow from a sales tax hike next April, which could crimp private consumption.