Japan's current account surplus widens


Japan's trade surplus is rising as export markets start to look healthier

Staff and wire reports

TOKYO, Japan -- Japan's current account surplus widened for the fourth month in January from a year earlier, the Ministry of Finance said Thursday.

The surplus rose 224 percent to 709 billion yen ($5.48 billion) in January, with the trade surplus rising more than 420 percent to 336.8 billion yen ($2.59 billion).

The current account is the broadest measure of trade in goods and services. The increased surplus suggests Japanese exports may be picking up again, and imports may be declining.

Japan's trade surplus fell 38 percent in 2001, its biggest drop since 1970 and a third straight year of decline, as export markets dried up.

Consumer spending has also plunged in recent months in the world's second largest economy as it continues to battle recession and deflation. Japan's economy is expected to contract by about 1 percent this year.

Even so, economists say they expect a turnaround as the U.S. economy continues to recover from the September attacks and East Asian economies also pick up.

East Asian growth

In its Global Development Finance 2002 report released in Washington Wednesday, the World Bank said it expects East Asia to grow at 5.2 percent this year.

Even though it says Japan will face more problems in its troubled banking sector, the bank is tipping a return to economic growth for Japan in 2003, with a GDP gain of 1.7 percent.

Japan's trade surplus in 2001 stood at 6.61 trillion yen ($49.13 billion) in 2001, the Ministry of Finance said recently.

The surplus with the United States -- its largest trading partner -- fell for the first time in five years, down 6.8 percent at 7.06 trillion yen ($52.46 billion), the ministry said.

Exports in 2001 were hit by the global economic slowdown, which began with a slump in the technology sector and was exacerbated by the September 11 attacks in the United States.

Japan's trade surplus with Asia saw its largest drop in 2001 since 1982, down 58 percent at 1.76 trillion yen ($13.09 billion).

A rise in exports this year, helped by a weaker yen, would be good news for Japanese manufacturers but a concern for neighboring countries such as Korea and Taiwan, who have grown increasingly wary over the yen's fall.

The yen traded Thursday at about 129.3 to the U.S. dollar. It hit its weakest level for more than three years on January 31 when it touched 135.16. It came close again on February 27, when it touched 134.98.

Reuters contributed to this report.