Japan’s Trade Surplus Falls in October

Japan’s customs-cleared trade surplus fell 32.9 % in October from a year earlier, the Ministry of Finance said Thursday, boding ill for an economy that looks like it is heading into a prolonged recession.

The ministry said the October trade surplus shrank to $3.75 billion, in unadjusted terms, after falling 18.3% a month earlier, as the fallout from the Sept. 1 terrorist attacks in the United States and the downturn in the information technology sector dragged down exports.

The surplus with the U.S., Japan’s largest trading partner, fell 4.3% year-on-year to $5.45 billion.

“There are no prospects of the trade surplus growing,” a Finance Ministry official said.

Exports to the United States fell 8.1% year-on-year while imports dropped 11.5%, underscoring the sluggish state of both economies.

The one exception was automobile exports to the United States, which rose 26.2% in value terms.

Economists attributed it to a rise in U.S. automobile sales due to sharp discounting and zero-interest loans.

Overall exports dropped 9% in October from a year earlier while imports declined 4.7%.

The overall trade surplus fell 43.1% in the first half of the fiscal year to September, the biggest drop since the second half of fiscal 1978-1979.