Japan's Trade Surplus Drops to $6.75 Billion

From Times Wire Services

Japan sliced its politically troublesome trade surplus in April for the 12th month in a row as imports surged to record levels.

The Finance Ministry said on Friday that its trade surplus dropped to $6.75 billion in April, from $7.54 billion a year ago and from $7.46 billion in March.

Japan's trade surplus with the United States also continued to fall, dropping to $4.13 billion in April, from $5.13 billion a year earlier.

Ministry officials attributed the steady decline mostly to the rise in value of the yen, which makes Japanese products more expensive overseas and tends to make imports less costly in Japan.

"In the background of this trend is, of course, the yen's appreciation for more than two years," a ministry official said, speaking on condition of anonymity.

Still, however, surveys show that much of the savings from cheaper exports has not been passed on to consumers.

Imports surged 31% from the previous year's level to a record $15.67 billion for the month, while exports rose 15% to $22.42 billion, the ministry said.

Officials said manufactured goods accounted for a record 49.9% of imports in April, surpassing the previous record of 48.8% set in February.

Officials noted an increase in imports of manufactured goods from newly industrialized Asian countries such as Taiwan and South Korea, attributing the rise to improved quality and price competitiveness.

The reduction in the trade imbalance with the United States was encouraging to the Japanese government, which has been under pressure from the United States to reduce its large trade surplus.

Exports to the United States fell 1.2% from the previous year to $7.34 billion, while imports shot up 39.7% to $3.21 billion.

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