Japan announced the first fall in its annual trade surplus in five years today, but the nation's surplus with the United States for both the year and the month of December rose, Finance Ministry figures show.
In fact, the overall trade surplus decline was due mostly to a rise in the price of oil--Japan's big import item--rather than a surge of imports from its major trading partners.
Also, Japan's surplus with its Western European trading partners rose sharply, a factor that could lead to heightened tensions with European Community nations at a time when the picture with the United States may be poised to improve.
Japan's 1987 total trade surplus of $79.83 billion was nearly 4% lower than the 1986 figure of $82.74 billion.
For the month of December alone, the surplus narrowed to $8.60 billion from $8.72 billion a year earlier, the ministry said.
Because crude oil prices almost doubled over the year, from a low of $9 per barrel in 1986, the import account for 1987 soared in dollar terms. Japan imports most of its oil, and that commodity makes up about one-third of its import bill. Oil products from the Middle East alone jumped 69.8% in value over 1986.
Sees Continuing Trend
But the oil factor is not stopping Japanese officials from predicting a bigger fall in the surplus of about $10 billion in 1988. "We believe the trade surplus is shrinking," a ministry official said.
Officials said they believe this will help reduce world trade tensions, especially with the United States.
The surplus with the United States in 1987 was $52.14 billion, slightly higher than the $51.40 billion in 1986.
For the month of December, the surplus with the United States grew to $4.91 billion from $4.74 billion a year earlier.
Japan's surplus with the European Community grew more than 20% to $20.12 billion in 1987 from $16.69 billion in 1986.
The switch in Japan's trade surplus from the United States to EC nations is one of the factors disguised by the fall in the overall surplus. Although the yen has more than doubled in value against the dollar in two years, it has barely moved against the major EC currencies. As long as Japanese goods can remain priced competitively in Europe, sales to that region will remain strong.
There have even been fears that Brussels might begin a new diplomatic offensive against Tokyo's trade surpluses, just at the time pressure from Washington is easing slightly.