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To: Haim R. Branisteanu who wrote (206594)	11/24/2002 7:47:31 PM
From: Haim R. Branisteanu	Respond to of 436258

Japan Trade Surplus Widens Sun November 24, 2002 07:36 PM ET TOKYO (Reuters) - Japan's trade surplus jumped in October, the eighth straight month of gains, but the strong rise was regarded by analysts as a blip and failed to dispel worries that an export slowdown is threatening to derail the economy. The customs-cleared surplus gained 95.6 percent from a year earlier to 902.0 billion yen ($7.33 billion), the Ministry of Finance said on Monday. That was larger than a median forecast for 710 billion yen by economists polled by Reuters last week. Economists had expected a sharp rise from a year ago, but said it was likely distorted by the September 11 attacks on the United States and a recent shutdown of West Coast ports. The port dispute paralyzed billions of dollars worth of U.S. trade and forced the government to intervene to get the ports back in business. Economists said that without the port closures, Japanese imports might have risen more, shrinking the trade gap. "The strong year-on-year rises of the past two months were both greatly affected by last year's September 11 attacks. For October, trade was also affected by the port closures," said Yoshimasa Maruyama, an economist at Mizuho Research Institute "I think exports overall are in a declining trend. I think we'll see weaker figures in the months ahead." Exports were up 14.3 percent from a year earlier to total 4.655 trillion yen, and gained 8.5 percent from the previous month on a seasonally adjusted basis. Imports were up 3.9 percent at 3.753 trillion yen from a year earlier and up 1.6 percent from a month earlier. TREND WEAKENING Analysts have warned that the sluggish U.S. economy and the stronger yen point to a weaker surplus in the months ahead. "The rise in the trade surplus for October was larger than we expected, but it's hard to be optimistic based on one month's figures alone," said Shuji Shirota, an economist at Dresdner Kleinwort Wasserstein. "If we look at the trade surplus on a weighted-average basis, gains in the surplus peaked in July and the surplus has been shrinking since then." After strong growth in the early part of this year, Japan's exports have been slowing, threatening to remove the main prop from a tentative economic recovery. Slack demand from the United States has been the main culprit, forcing major exporters such as Fujitsu Ltd and Hitachi Ltd to cut earnings targets for the full year to next March. Net exports made a negative contribution to Japan's economic growth in the July-September quarter for the first time in a year, and many economists expect that trend to continue as the global economy shows few signs of making a robust recovery. The July-September figures showed the overall economy crawled ahead at a slowing pace, helped by resilience in consumer spending that most analysts doubt will last in the face of corporate cost-cutting and anxiety over the banking system. Reuters polls show that a rush of statistics later this week will likely reveal a further cooling in Japan's economy as winter sets in, piling even more pressure on policy-makers to ward off yet another recession. The government will release data on industrial production and jobs for October as well as October nationwide and November Tokyo area consumer price data on Friday -- all of which are expected to depict a sputtering economic recovery hampered by deflation. A poll of 20 economists last week produced a median forecast of a rise of 0.4 percent month-on-month in October industrial production, a key gauge of activity at Japan's mines and factories.