Japanese Trade Surplus Down Sharply in August

Japan’s politically embarrassing trade surplus dropped steeply to $5.15 billion last month from $7.48 billion in August, 1986, reflecting a sharp rise in the nation’s appetite for foreign goods, the government announced today.

Japan’s trade surplus has eased month by month since the end of last year but the latest decline is the most dramatic.

Economists said the fall should ease some of the trade friction between Japan and the United States, where Congress is considering protectionist trade legislation.

Japan’s surplus with the United States shrank in August to $3.73 billion from $4.41 billion in the same month a year ago. The decline, a 15.3% drop from last year’s surplus, marks the first double-digit decrease in more than two years.

Japan’s overall trade surplus had exceeded $6 billion for the last year and a half except for January, which is an atypical month because of the long New Year holidays.

The accelerating decline in its surplus is due in part to the stronger yen, which makes Japanese goods relatively more expensive.

But Finance Ministry officials were quick to note the strong 32.9% growth in imports to $12.43 billion, the sharpest rise since July, 1980.

Japanese exports last month grew by 4.4% to $17.58 billion.

The United States is to release its July trade figures Friday.