Japan’s Trade Gap Widens Again, Fueling U.S. Concerns

Japan’s current-account surplus rose in February for the second consecutive month, the government said Monday, contributing to mounting U.S. concern over trade imbalances.

Tokyo’s surplus in its current account, the broadest measure of trade in goods and services, rose 15.4% to $6.92 billion in February from a year earlier, the Ministry of Finance said.

The surplus was slightly above economists’ average forecast of $6.40 billion and followed a rise in January, the first in 17 months.

Japan’s surplus in merchandise trade alone rose 2.9% to $7.02 billion from the same month a year earlier.

The current-account data were closely watched by financial markets after Friday’s visit to Tokyo by U.S. Treasury Secretary Robert Rubin, who urged Japanese officials to guard against a resurgence in the surplus.

A further rise in Japan’s current-account surplus would reignite trade friction with Japan, Rubin said.

But Monday’s news of a widening of the surplus failed to dent bullish sentiment toward the dollar, which jumped to a 50-month high of 125.56 yen.

Economists said the surplus will probably continue to rise, with current-account data showing that Japan’s economic growth owes a great deal to strong exports.

It provides “good evidence that Japanese exports benefit from the gain in competitiveness, as well as a pickup in global demand,” said Jesper Koll, chief economist at J.P. Morgan.

Although Koll said he does not expect the surplus to trigger a shift in trade policies in either the United States or Japan, he expects the surplus to expand from 1.5% of Japan’s gross domestic product to 2% by the end of the year.

However, economists generally believe that a sustained resurgence in Japan’s surplus may open the door for a change in U.S. policy.