Japan’s Trade Surplus Jumps 38% : Officials Predict Strong Export Growth Will Continue

Japan’s Finance Ministry reported Monday that Japan’s trade surplus rose sharply in November, growing by 38% from a year earlier to $6.55 billion.

Japan’s surplus with the United States climbed to $4.42 billion from $4.21 billion a year earlier, the ministry said, reversing 11 straight months of decline.

While the overall November surplus was smaller than October’s $7.69-billion surplus, it surpassed forecasts of a $6.5-billion surplus.

Exports surged 19.5% over a year earlier to $22.6 billion, while imports climbed 13.4% over a year earlier to $16.1 billion, ministry officials said.

The officials predicted that strong export growth “will continue in the future.”

The expansion in the surplus is partly due to weaker oil prices, which tend to dampen import figures, said Charles Elliot, director of research for the investment firm Goldman Sachs in Tokyo.

41% Growth Rate

It also results from growing exports of components to overseas subsidiaries of Japanese manufacturers.

But a recent study by the Bank of Japan shows that Japanese businesses have boosted their expectations for sales and profits due to strong domestic demand plus resurgent exports.

A report by the Economic Planning Agency shows exports grew more than 41% from July to September, Elliot said.

“Now the volume of exports is increasing. We hope growth in imports will be faster, but there’s a long way to go to balanced trade,” said Richard C. Koo, senior economist with Nomura Research Institute.

Japan’s economic growth shrank 0.8% in the first quarter of fiscal 1988, which began April 1; it grew 2.2% in the July-September quarter, partly due to the recovery in export sales, according to the Economic Planning Agency.

Growing exports to the European Community, Southeast Asia and the United States are behind the surge, Finance Ministry reports show.

Japan’s surplus with the United States, which had slipped 3.1% from a year earlier to $4.83 billion, grew in November due to a faster flow of passenger vehicles, machinery and other manufactured products, according to the officials.

Exports to EC countries rose 28.4% over a year earlier to $3.73 billion in November, compared to a 23.2% increase in imports to $2.20 billion. That left a surplus of $1.53 billion, up from $1.12 billion a year earlier.

Exports to Southeast Asian nations rose 27.2% to $5.80 billion, while imports climbed only 8.2% to $4.16 billion, resulting in a trade surplus of $1.64 billion dollars, up from $710 million in November, 1987.