Japan’s Trade Surplus Down 16% for 1988 : Stronger Yen Fuels Sharp 6-Month Drop

Japan’s trade surplus shrank 16% during the first half of 1988 as booming imports outstripped a moderate increase in exports, the Finance Ministry reported Tuesday.

Analysts said the United States was a major beneficiary of the increased imports.

The ministry said in its preliminary report that Japan’s trade surplus during the first six months of the year was $33.7 billion, or $6.4 billion less than in the first half of 1987.

In June, the country had a surplus of $5.92 billion, down $668.3 million from the same month last year.

Japan’s surplus with the United States dipped 14.9%, from $24.6 billion to $20.9 billion, for the first half of this year compared to the same period in 1987.

Imports Increase

The ministry attributed the rapid decline in Japan’s trade surplus to the steep increase in imports, fueled by the sharp rise in the value of the Japanese yen against the U.S. dollar in the past three years.

The stronger yen made foreign products cheaper in Japan and Japanese products more expensive abroad.

The rising yen boosted the country’s imports by 34.3% to $91.8 billion for the first six months of 1988 on a custom-cleared basis, while exports rose 15.7% to $125.4 billion.

The statistics showed American exporters, bolstered by the weak dollar, are increasing their sales in Japan faster than European and Asian exporters.