Japan Trade Surplus With U.S. Falls 19%

Japan’s trade surplus with the United States narrowed 19% last month to $2.76 billion from a revised $3.4 billion a year earlier, the Finance Ministry said Wednesday.

It was the first year-to-year decline in four months and is expected to come as welcome news in both Washington and Tokyo, where trade tensions have been flaring again.

Officials of the two countries ended two days of trade talks in Japan on Wednesday and reportedly agreed to cooperate in reducing the trade imbalance.

Last month, a rise in imports by Japan helped reduce that nation’s overall trade surplus to $3.78 billion, down 27% from a year earlier and 48% from the previous month, the Finance Ministry said.

In April, Japan’s trade surplus showed a rise of 7.7% from the previous year to $7.30 billion. In May, 1988, it was $5.19 billion.

Ministry officials said May’s unadjusted surplus was smaller than expected as imports grew despite the relative weakness of the Japanese yen against the dollar during the month.

Sharp Drop From April

However, that weakness in the yen also tended to make the surplus look smaller when expressed in dollars, they said.

Japanese exports in May rose 4.9% from the previous year to $21.67 billion, while imports climbed 15.7% to $17.89 billion.

After seasonal adjustment, the May surplus came to $3.61 billion, down sharply from $6.74 billion in April.

May exports were calculated using an average exchange rate for the month of 133.98 yen to the dollar, compared to 124.75 yen in May, 1988. Imports were calculated at an average rate of 133.78 yen, compared to 124.76 yen a year earlier.

A Finance Ministry official, who spoke on condition of anonymity, said continuing strong domestic demand spurred by Japan’s healthy economy contributed to the rise in imports. But he said import figures also were boosted by world oil prices, which he said averaged $18 a barrel in May, compared to $16.20 a year earlier.

The percentage of manufactured products among Japan’s total imports fell to 48.6%, the lowest level this year, the official said. The level had been increasing in recent months.

Exports to the United States rose 3.2% from a year earlier to $7.13 billion, while imports from the United States surged 24.6% to $4.37 billion.

Imports of general food products from the United States rose 23.4% to $970.4 million, while Japan’s purchases of U.S. chemical products rose 46% to $538.8 million.

Imports of general U.S. machinery products, including semiconductors and cars, rose 23.3% to $1.18 billion. Within this category, Japanese imports of U.S.-made motor vehicles surged 148% to $53.2 million.

Japanese exports to the United States of general electrical machinery, including videotape recorders, video cameras and semiconductors, rose 11.9% to $1.62 billion. But within this category, exports of television cameras fell 16.7% to $127.6 million.