Japan 2004 trade surplus hits 5-yr high on surging exports to Asia
[Lots of stuff here Yiwu, any comments? Mish]
Wednesday, January 26, 2005 2:44:53 AM
TOKYO (AFX-ASIA) - Japan's merchandise trade surplus rose to its highest level in five years in 2004 on soaring exports to Asia, with greater China replacing the US as Japan's biggest trading partner, the Ministry of Finance said
Yet some economists are voicing concerns over the sustainability of the growth of Japan's trade surplus amid the prolonged inventory adjustments in the information technology sector, soaring commodity prices, lingering threat of a strong yen and supply capacity shortage in Japan
"Due to the combination of soaring base material prices and slowdown of exports of electronics devices, net exports are not likely to make any positive contribution to Japan's GDP in the near term," Daiwa Institute of Research senior economist Junichi Makino said
"In the fourth quarter to December, net exports might already had a negative contribution to real GDP, raising the possibility that Japan might have suffered a contraction in this quarter," he added
In 2004, merchandise trade surplus rose 17.9 pct from a year earlier to 12.01 trln yen, the fourth straight year of expansion, amid a 7.5 pct appreciation in the value of the yen to 108.28 yen against the dollar from a year earlier
"Trade activity with Asia was buoyant throughout the year," a finance ministry official said
"And as evidence, greater China (including Hong Kong) has replaced the US as the largest trading partner for Japan for the first time." The share of trade of greater China, as measured by the combined value of exports and imports of China and Hong Kong to the total, rose to 20.1 pct in 2004 from 19.2 pct in 2003
On the other hand, the share of the US slipped to 18.6 pct in 2004 from 20.5 pct a year earlier
"For China, exports of not only base materials and construction equipment but also of digital and semiconductor products are now expanding rapidly," the MoF official said
China's National Bureau of Statistics said yesterday that the nation's gross domestic product accelerated by 9.5 pct to 13.65 trln yuan in 2004 despite the government's efforts to rein in economic growth
Japan's exports to China jumped 20.5 pct from a year earlier to 8.00 trln yen in 2004, while imports from China increased 16.8 pct to 10.20 trln yen
Increased trade with China boosted Japan's exports to Asia by 17.1 pct from a year earlier to a record 29.6 trln yen last year while imports to Japan from Asian nations increased 12.6 pct to a record 22.2 trln yen
As a result, trade surplus with Asia soared 32.9 pct to a record 7.43 trln yen in 2004
Meanwhile, the MoF official dismissed the significance of the recent tsunami disaster in Indonesia, saying that as few Japanese firms have their production base in the region, "the tragedy is not likely to have a major impact" on the trend of Japan's trade activities
Buoyed by brisk trade with Asia, Japan's overall exports increased 12.2 pct to a record high 61.18 trln yen in 2004, the third consecutive year of growth while imports jumped 10.8 pct also to a record 49.17 trln yen, the second straight year of expansion
Overall exports of optical equipment, including semiconductor processing equipment, rose 22.7 pct, contributing 0.8 percentage point to overall export growth
Shipments of steel jumped 22.0 pct, boosting overall export growth by 0.8 percentage point, while exports of semiconductor chips and electronic devices, rose 7.9 pct, contributing 0.6 percentage point to total export growth
But as Japanese producers are faced with increased capacity shortage problems, Japan's second-largest steelmaker JFE Holdings Inc executive vice president Tetsuo Miyazaki has said his firm no longer has room to boost production to meet growing demand both in Japan and in China
In terms of imports, purchases of crude oil increased 13.8 pct in 2004 from a year earlier, contributing 1.7 percentage points to overall import growth, while imports of coal, used in steel production, jumped 46.6 pct, boosting total import growth by 0.8 percentage point
Imports from the US fell for the fourth straight year, down 1.0 pct to 6.76 trln yen, hit by a 50.8 pct drop in imports of beef because of a continuing ban on US beef in the wake of the mad cow disease affecting cattle there
But exports to the US rose 2.3 pct to 13.72 trln yen, marking the first rise in two years. That boosted Japan's trade surplus with the US by 5.7 pct to 6.96 trln yen, also the first increase in two years
Trade surplus with the EU rose 14.5 pct from a year earlier to 3.27 trln yen, the second straight year of growth, as exports to the region gained 10.1 pct to 9.47 trln yen and imports rose 8.0 pct to 6.21 trln yen
In December, Japan's merchandise trade surplus rose 1.8 pct from a year earlier to 1.14 trln yen, against the consensus forecast of 1.126 trln yen, according to the average of forecasts in a Nihon Keizai Shimbun poll of 22 brokerages and research houses
Exports last month rose 8.8 pct to 5.40 trln yen in December from a year earlier, while imports increased 10.9 pct to 4.25 trln yen
By region, Japan marked its largest trade surplus with Asia in December, at 706.9 bln yen, the second consecutive monthly rise
Exports to Asia rose 7.5 pct from a year earlier to 2.63 trln yen, the 34th straight monthly rise, while imports gained 11.7 pct to 1.92 trln yen, the 28th consecutive monthly gain
Japan registered a trade surplus of 344.9 bln yen with the EU in December, up 29.2 pct from a year earlier and the 13th consecutive monthly rise, led by a 11.0 pct jump in exports
Imports from the EU inched up 1.6 pct from a year earlier, supported by a 16.6 pct growth in imports of meat amid strong demand for frozen pork due to the continuing ban on imports of US beef
Trade surplus with the US rose 18.9 pct year-on-year to 663.8 bln yen in December
For the month, exports to the US rose 6.0 pct to 1.18 trln yen, the seventh straight monthly rise, led by a 65.3 pct rise in exports of motorbike parts, while imports dipped 6.8 pct to 518.8 bln yen, the first fall in five months
Imports of meat from the US dropped 40.2 pct year-on-year
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