Japan’s Trade Surplus With U.S. Soars 31% in November

Japan’s global trade surplus, driven by auto exports, rose unexpectedly in November for the first time in two years--and the politically sensitive surplus with the United States shot up 31%, the Finance Ministry said today.

Though the ministry asserted that the overall trend remained downward, some private economists said recent statistics show that the decline in Japan’s worldwide trade surplus that began nearly three years ago has already bottomed out and a reversal has begun.

“Yen depreciation is sparking a mini-export boom in Japan,” said Jesper Koll, head of economic research at J.P. Morgan Securities Asia Ltd. “It is particularly the car exports that are benefiting . . . and particularly the bilateral trade surplus with the United States that is being pulled higher.”

Japan’s global car exports were up 28%, with a 46% leap in exports to the United States compared with November 1995. Imports of foreign autos, which had been growing rapidly in percentage terms, were down 3.4%.

The dollar hit a post-World War II low of 79.75 yen in April last year, but since the summer of 1995 it has regained strength dramatically. It traded shortly after the trade surplus announcement in Tokyo this morning at 113.5 yen, down 0.35 yen from its late trading in New York on Tuesday.

A weaker yen makes Japanese exports more competitive overseas, and Detroit car makers have been expressing concern for many months about the potential impact on them of yen depreciation. Any sustained rise in Japan’s trade surplus, especially that with the United States, could trigger renewed trade tensions, which had recently cooled.

Japan’s November global trade surplus was $5.9 billion, or up 0.2% in yen terms compared with November 1995, the Finance Ministry said. It did not issue any comparisons in dollar terms. The November surplus with the United States surged 31% in yen terms to $3.3 billion, it said.

Most Tokyo-based economists had expected the November figures to show a significant drop in Japan’s global surplus compared with a year earlier.

“The Ministry of Finance claims the trade surplus is still on a declining trend, but this is hardly supported by” the latest statistics, said Richard Jerram, an analyst at Barings Securities in Tokyo. “As exports continue to grow and imports slow due to the [expected] domestic demand slowdown next year, by mid-1997 there will be clear evidence that the external surplus is rising.”