Japan trade surplus rises again as Clinton
visits
Wednesday November 18, 10:27 pm Eastern Time
By Yoko Nishikawa
TOKYO, Nov 19 (Reuters) - Japan's trade surplus with the United States
recorded another solid jump in October underscoring persistent trade tensions
between the two nations as U.S. President Bill Clinton was due to arrive in
Tokyo on Thursday.
Japan's trade surplus with the United States climbed to 719.74 billion yen ($5.89 billion), up 32 percent from the
previous year, the Ministry of Finance (MOF) said on Thursday.
Japan's exports of automobiles to the U.S. rose 31 perecent, while steel exports -- recent focus of U.S. dumping charges
-- surged 115 percent.
The overall customs-cleared trade surplus for October rose 24 percent from a year earlier to 1.37 trillion yen, the MOF
added.
The data followed an overnight announcement by the U.S. Department of Commerce that Mexico had displaced Japan as
the United States' second largest trading partner, as financial turmoil in Asia slowed U.S. trade with the region.
U.S. exports to Japan in September fell by 8.7 percent year-on-year, the Department of Commerce said.
Clinton is due to arrive Tokyo later Thursday and is expected to press for swift economic recovery in Japan in a meeting
with Prime Minister Keizo Obuchi on Friday.
Obuchi said earlier on Thursday that he would show Clinton Japan's strong determination to secure positive economic
growth in the fiscal year starting next April, and explain the government's latest economic stimulus package totalling
nearly 24 trillion yen.
Japan has been under pressure by its trading partners to boost its domestic demand to suck more imports in and to take a
leadership in reviving crisis-hit Asian economies.
U.S. Deputy Treasury Secretary Lawrence Summers, who will accompany Clinton in Tokyo, said on Tuesday it was
key for the U.S. economy that Japan get back on track.
''Clearly we have an important stake in growth in Japan, both because of its impact on export demand for U.S. products
and because our capital markets are very tightly linked,'' he told a news briefing at the White House.
Economists said the rise in the trade surplus was mainly caused by a continued decline in imports due to weak domestic
demand that outpaced a drop in exports.
Exports -- viewed as a core engine for supporting the nation's faltering economy -- fell both in volume and value terms in
October. Economists said a recent rise in the yen had put downward pressure on the exports, which declined in value
terms for the first time in five months.
A finance ministry official said Japan's exports decreased as sales to Asia remained weak, adding that it was hard to say
how a recent strength in the yen would affect moves in the trade surplus.
But he reiterated that the tempo of the rise would stablise, although the ministry expected a rise in the surplus for a while.
Economists said although the United States might put further pressure on Japan to take steps to prop up domestic demand
and shore up the fragile financial system, Thursday's trade data alone would not trigger major trade friction.
''When there was trade friction in the past, the United States was worried about its labour market conditions. But now,
its job market is stable on the back of the strong U.S. economy and a major friction is unlikely to appear,'' said Satoshi
Shimamoto, an economist at Standard & Poor's MMS.
He added that since there has been a change in the trade structure, where many Japanese factories in the United States
create jobs for the U.S. workers, ''the United States cannot just blame Japan for the surplus.''
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