Japan Surplus in Balance of Payments Soars : * Foreign relations: News of the threefold jump heightens tensions before President Bush’s visit.
Only days before President Bush visits Japan to tackle what promises to be thorny trade issues, Tokyo announced Thursday a more than threefold increase in its current account balance of payments surplus.
The nation’s current account balance--the broadest measure of trade in goods and services--widened to a $7.26-billion surplus in November without being adjusted for seasonal factors, from a surplus of $1.69 billion in the same month a year earlier, the Finance Ministry said.
“When Bush arrives in Tokyo he is going to be seeing red--red ink,” said Kenneth Courtis, senior economist at Deutsche Bank Capital Markets (Asia) Ltd.
Criticism of Japanese trade practices is mounting quickly in Congress these days, fueled by developments such as General Motors Corp.'s recent decision to close down 21 plants and slash its work force by 74,000 people.
Japanese officials are bracing for stinging attacks from Washington, and economists say that when Bush arrives in Japan on Jan. 7 for a four-day visit, much of the lobbying will likely be targeted at opening Japanese domestic markets.
The key component of the current account, the trade balance, ballooned to $8.65 billion last month from $4.43 billion a year earlier.
In a pattern that has been evident much of this year, it was sagging Japanese imports that pushed the surplus higher. Imports fell to $17.64 billion from $20.62 billion a year earlier.
Although Japan’s slowing domestic economy has undercut purchases of foreign goods much of the year, recent months have seen especially weak figures because of high oil prices a year ago.
Crude oil prices have plunged from highs during the Gulf crisis, from about $34 a barrel in November, 1990, to about $20 in November this year.
Exports, meanwhile, grew an unimpressive 5% to $26.29 billion from $25.05 billion a year ago.
Export growth has slowed sharply much of this year as slower economic growth among Japan’s main trading partners has curtailed what Japan sends abroad.
But Courtis pointed out that Japanese auto makers are still managing to expand their market share abroad at a time when manufacturers in other nations are retrenching.
“The message is that in this key market, Japanese companies are still expanding,” he said.
The most recent Finance Ministry figures showed that Japan’s November trade surplus with the United States was $3.59 billion, up from $3.56 billion in the same month last year.
The other major component of Japan’s current account, the so-called invisibles category that includes trade in services, tourism and some unilateral transfers, was in deficit by $1.15 billion, compared to a $2.48-billion shortfall a year earlier.