Japan suffers 1st Asian loss

Japan suffers 1st Asian loss

TOKYO (AFP): Japan suffered its first trade deficit with Asia in eight years in January while its surplus with the United States grew ever larger, pushing the month's overall surplus up to 381.5 billion yen (US$3 billion), the finance ministry said yesterday.

Trade with Asian neighbors registered its first deficit since January 1990 as the region's financial crisis struck home, with exports to South Korea, Thailand and Indonesia hardest hit.

Yet the politically sensitive trade surplus with the United States soared more than 65 percent, the ministry said.

The overall surplus reversed a 24.5 billion yen deficit recorded a year earlier, the ministry said.

"Exports to Asia have been weakening recently, due to falls in demand in countries hit by the currency crisis," a ministry official said.

It is the first clear effect of the crisis on the trade figures of the world's second largest economy and could signal the start of a long-running decline in the region, analysts warned.

"Japan's trade surplus is likely to expand year-on-year for the time being, given the recent trend, but the surplus is not likely to continue to expand sharply in the mid to long term, taking into account the ongoing changes of economic and trade structure," the official said.

Exports in the month rose 8.8 percent year-on-year to 3,853.7 billion yen, expanding for the 30th straight month.

The increase was led by a 27.5 percent rise in ship exports, and a 22.8 percent growth in auto exports, both in terms of value.

Imports dropped 2.6 percent to 3,472.2 billion yen, the first decline in two months, the ministry said.

Japan's trade with Asian countries, a crucial area which absorbs some 40 percent of Japan's exports, left a deficit of 34.3 billion yen in January.

Exports to Asia slumped 9.4 percent to 1,260.2 billion yen and imports shrank 2.8 percent to 1,294.4 billion yen.

Exports to countries hit by the currency crisis fell sharply -- down 41.6 percent year-on-year for South Korea, down 34.5 percent for Thailand and down 18.3 percent for Indonesia.

Japan's trade surplus with the United States surged 65.7 percent from a year earlier to 493.9 billion yen, the 16th consecutive monthly rise, led by brisk demand there.