Japanese Trade Surplus Doubles From Last Year

Japan’s trade surplus shot up 127% in October, the government said Wednesday, as the United States was set to press Japan to open its markets to foreign goods.

U.S. Trade Representative Carla Anderson Hills is scheduled to travel to Tokyo today and is expected to push the Japanese to accept more overseas products.

But Japanese officials say the trade surplus has surged largely because of a recent slowdown in the economy, reducing demands for imports.

Early today, the Bank of Japan lowered its official discount rate--the rate the central bank charges on loans to commercial banks--by half a percentage point to 5%, in an attempt to boost the economy.

The move, which had been widely expected since early October, came after managers of the central bank’s branches warned that Japan’s businesses needed psychological encouragement to avert a recession next year.

The Ministry of Finance said the surplus of exports over imports in October was $7.34 billion, compared to $3.23 billion in October, 1990.

The surplus with the United States--Japan’s largest market for its exports--changed little, rising to $3.89 billion from $3.72 billion a year earlier.

Still, trade relations between the world’s two most powerful economies have not been easy. The approaching presidential election in 1992 could bring new charges of unfair Japanese trade practices.

The rise in the surplus last month was fed by a sharp drop in imports, the ministry said.

Economists warned that the trend of growing surpluses may continue for at least another five months.

“The remarkable feature this time is that imports have slumped, particularly from Europe, while exports changed relatively little,” said Nobuyuki Saji, senior economist at Nikko Research Center Ltd.

“This is a very dangerous pattern,” Saji said.

Imports declined 9.9% from a year earlier to $21.16 billion. Exports increased 6.7% to $28.5 billion.

For the last six years, Japan has been trying to cut the size of its surplus and fight off foreign criticism by decreasing the volume of exports and increasing imports.

But Japan’s economic slowdown has stalled imports from Europe, especially luxury items such as Italian fashion, art objects and high-class automobiles.

At the same time, Japanese firms are exporting more to Europe and Asia to make up for weak U.S. demand.

In October, Japan posted its 12th consecutive month of rising surpluses with the European Community at $2.29 billion, up from $1.57 billion in October, 1990.

Imports from the EC dropped 13.3% to $2.79 billion, and exports rose 6% to $5.08 billion.