Japan trade surplus rises, but eases against U.S.

Japan trade surplus rises, but eases against U.S.

TOKYO (Reuters): Japan's overall trade surplus jumped in January from the same month a year ago but the surplus with the United States edged down slightly, easing fears that it could re- ignite a Japan-U.S. trade row.

The Ministry of Finance (MOF) said on Monday Japan's custom- cleared trade surplus for January rose 87.0 percent from a year earlier to 760.3 billion yen ($6.23 billion). The surplus with the United States fell 2.2 percent from a year earlier to 487.2 billion yen.

Although the overall surplus was at the higher end of expectations, economists said it was no surprise taking into account recent trends and also the volatile tendency of January figures, given the New Year's holiday.

"It was pretty much a 'no surprise' although a bit above the consensus," said Michael Lockrow, an economist with Thomson Global Markets in Tokyo.

January marked the second consecutive month that the trade surplus has grown from the year-earlier level, as a fall in imports outpaced that in exports due to Japan's weak domestic economy.

MOF data showed the value of exports dropped for a fourth consecutive month in January, down 10.6 percent from a year ago, while imports were down for the 13th month in a row, slipping 22.1 percent year-on-year.

Japanese officials played down the data. One MOF official said the overall trade surplus was likely to "settle down".

Thomson's Lockrow said the United States seemed to be more concerned with fixing the Japanese economy than with its trade deficit with Tokyo.

"I don't think the trade issue right now is at the top of the list for the U.S. Right now, it's more the bit about the economy here and if Japan can get its act together," Lockrow said.

But economists said Japan was likely to continue to run a surplus with the United States, although its overall surplus was expected to fall or even turn into a deficit amid the continued weakness in Asian economies and a prospective downturn in Europe.

"It is difficult to imagine (exports to Asia) increasing year- on-year any time soon," said Hiroshi Kuribayashi, an economist with Barclays Capital Japan.