Japan’s Trade Surplus Takes a Slight Dip

Japan’s trade surplus narrowed slightly in October, ending a string of record surpluses, but the drop was not enough to constitute the turnaround that Japan’s trading partners seek.

The surplus shrank to $8.72 billion from the all-time peak of $9.80 billion posted in September but was sharply higher than the $5.39-billion surplus reported for the same period a year earlier, the Finance Ministry said Friday.

Japan’s imports last month increased to $10.15 billion from $8.94 billion in September, but were lower than the $10.61 billion posted in October, 1985. Exports also rose but less rapidly. The Finance Ministry said they were up to $18.87 billion last month from $18.74 billion in September and $16.01 billion in October last year.

Under an agreement a month ago, U.S. officials agreed to stop calling for further appreciation of the yen, which has advanced strongly against the dollar in the last year, making Japan’s exports more expensive and its imports cheaper.

Trade Turn Foreseen

Many analysts say that a turnaround in the Japanese trading position may be approaching and that this should help reduce the U.S. deficit, which totaled $12.1 billion in October, according to figures released in Washington on Wednesday.

Meanwhile, Britain’s top trade official said Friday during a visit to Tokyo that the huge Japanese trade surpluses and record U.S. deficits seriously threaten the world’s free trade system.

Paul Channon, secretary of state for trade and industry, also warned that there is a mood of “increasing concern” in Britain about its continuing trade deficits with Japan because of Japanese barriers to British products.

“We sell 10 times as much to the United States as to Japan,” he said. “That is a very curious paradox that is shared by many other countries in the world.” Britain sells about $15 billion worth of goods to the United States per year, while its exports to Japan total only about $1.5 billion, he said.

Warns of Dangers

Speaking to reporters at the Japan Press Club here, Channon warned of “very great dangers in the present unstable trading situation,” in which Japan is accumulating the largest trade surplus in history, and the United States has the world’s largest deficit.

“The world trading system cannot indefinitely go on like that,” Channon said.

“There are very great risks in the situation, and it is not surprising that the American Congress is very protectionist as it sees jobs going away and industries threatened,” he said.

In another development Friday, the Electronics Industries Assn. of Japan reported that the country’s exports of color television sets plunged for the third straight month in October but that overseas shipments of video cassette recorders rose slightly.

Exports of color TVs fell 49.1% from a year earlier to 386,000 units, continuing a recent downtrend caused partly by the yen’s increasing value. Color television exports fell 46.6% in September and 64.2% in August compared with the year-earlier periods.

The association said the decline in the latest reporting month resulted mostly from an 89.6% plunge in shipments to China, which totaled 27,000 sets. China, the largest overseas market last year for Japanese color TV makers, has been restraining imports because of a foreign currency shortage. Exports to the United States fell 39.2% to 98,000 sets.

At the same time, video cassette recorder exports gained 3.9% from the year-earlier level to 2.549 million sets. Exports to the U.S. market rose 8.8% to 1.625 million sets, reversing a 0.9% dip the previous month.