Japan’s Trade Surplus Soars to Record Level in September

Japan scored its biggest monthly trade surplus ever in September, forcing the government to concede what economists have been saying for months--the trend toward a shrinking surplus has been reversed.

The September surplus was an unadjusted $9.76 billion, the biggest on record, the Ministry of Finance said Monday. It compared to $6.89 billion in September, 1990.

The previous record monthly surplus was $9.716 billion in December, 1988.

“The change to an expanding trade surplus has been noticeable since the beginning of the year, mainly due to an economic slowdown here,” said Kusuo Aoki, an economist at Yamaichi Research Institute. A slower economy reduces demand for overseas goods, tilting the trade scale toward exports.

“This expanding trend in the surplus is likely to continue until the end of 1991, or later,” he said.

The surplus with the United States rose 7.1% to $4.62 billion in September from a revised surplus of $4.31 billion a year earlier.

Economists said weak imports were mainly responsible for the near 42% growth in the overall September surplus year-on-year. The surplus has grown against 1990 levels every month this year.

“Taking the sharp rise in the trade surplus for the first six months of the current fiscal year into consideration, the narrowing trend in (Japan’s) trade surplus seems to have been reversed,” a finance official told a news conference.

Economists said imports declined 5.7% year-on-year to $17.89 billion in September because of the slowing Japanese economy.

With consumers growing cautious, expensive imports such as luxury cars and art declined. Gold imports also fell off.

Lower oil prices since the end of the Gulf War also helped to cut the import bill, economists said. Crude oil prices were at $19.00 a barrel in September against $22.44 a year ago.

Exports continued to grow for the 16th month in a row, climbing by 6.9% to $27.64 billion in September.

Growth in exports was mainly due to a higher yen and strong demand for Japanese industrial machinery and equipment in Europe and Asia.

Increasing exports of videotape recorders and office equipment also helped widen the trade surplus.

While Japan’s surplus with the United States grew only moderately, the surplus soared against other nations.

The surplus with the European Community surged by 35.7% to $2.76 billion, with imports from the EC dropping 21.9%. It was the 11th straight month of a widening surplus with the EC.

Japan’s surplus with Asia rose by 25.4% to $2.87 billion, with exports surging 13.1%. It was the 19th month in a row the surplus with the rest of Asia had widened.