Japan’s Trade Surplus Falls 23% in November

Japan’s trade surplus fell 23% in November to $6.58 billion, and the gap with the United States narrowed even more dramatically--to half that of a year ago, the government reported Monday.

Economists attributed the overall decline to fast growth in imports from Asia, mainly of goods produced by Japanese companies taking advantage of lower labor costs.

Japan’s trade surplus with the United States, a major cause of friction with Washington, took its biggest fall in five years.

Exports to the United States fell for the third straight month, helped by a drop in Japanese car shipments, which tumbled 35.2% from a year earlier.

Economists said exports to the United States should continue to fall as long as the Japanese currency stays at about 100 yen to the dollar. If the dollar strengthens, it could inhibit the slide, they said.

Economists had expected a fall in the overall surplus of at least 30%, said Yasushi Okuda, an economist at BZW Tokyo.

“Imports were in line with expectations, [but] exports were higher than we expected,” he said.

Last week, economists had forecast that the overall November customs-cleared trade surplus would plunge to about $5.8 billion from the revised $8.55 billion of last year. In October, the surplus fell by 42% from a year earlier to $5.33 billion--the largest drop since April 1990.

Imports in November climbed 11.4% from a year earlier to $28.84 billion, and exports edged up 2.8% to $35.42 billion. Many economists had said they were expecting a decline in exports because of smaller shipments of cars to the United States.

Imports from Asia totaled $10.78 billion in November, a 16.9% increase from a year earlier.

“This trend is likely to continue,” said Tetsuro Sawano, an economist at Nikko Research Center. “Japanese companies are producing more machinery goods in Asia and importing the goods back into Japan.”

Such goods include televisions and videotape recorders. For the last few years, Japanese companies have been moving production to Southeast Asia, where labor costs are much lower, in order to be more competitive at home.

Japanese exports to Asia remained strong in November, rising 12% from a year earlier to $15.65 billion.

Exports there were brisk because of the high economic growth there, Sawano said.

The politically sensitive trade surplus with the United States came to $2.82 billion in November, down sharply from $5.14 billion a year earlier.

Imports from the United States were strong in November, rising 24.2% to $6.53 billion, but exports fell 10.1% to $9.35 billion.