Japan’s U.S. Trade Surplus Falls for 13th Time in Row

Japan’s trade surplus fell 21% to $5.05 billion in May, the 13th-straight month the surplus has decreased from its level of a year earlier, the Finance Ministry said Thursday.

The country’s trade surplus with the United States fell 25.6% to $3.30 billion from $4.44 billion in May, 1987. It was also down from $4.13 billion the previous month.

Economists were divided over whether the trade deficit would continue to shrink.

“In a word, I think we can say things have been moving in a desirable direction,” said Toshiaki Kakimoto, chief economist at Sumitomo Bank Ltd.

Imports are likely to continue to grow while the yen’s appreciation and the shift in production to overseas by Japanese manufacturers will restrain exports, leading to a continued drop in the trade surplus, Kakimoto said.

Coping With Yen

However, the Paris-based Organization for Economic Cooperation and Development predicted separately Thursday that the surplus will fall only slightly in the next 18 months, despite the higher level of imports brought on by surging domestic demand.

In its latest six-month review of the world economy, the OECD said the surplus would decline modestly to $94.75 billion this year and $92.5 billion in 1989, from $96.4 billion in 1987.

Yoshihiro Furukane, senior economist at Yamaichi Research Institute of Economics here, agreed, saying that, although imports are growing, exports are also up because Japanese manufacturers have found ways to cope with the strength of the yen.

May’s overall trade surplus was down from $6.42 billion in the same month last year and from $6.77 billion in April, according to figures the ministry released.

Japan’s trade surplus has shrunk in comparison with the same month a year earlier since May, 1987, reflecting the sharp rise in the value of the yen and expanding domestic demand in the Japanese economy.

Imports surged 26.7% to $15.45 billion from $12.2 billion in May, 1987, although they dipped 1.7% from April’s $15.7 billion.