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To: IceShark who wrote (25242)	3/15/1999 8:32:00 AM
From: John Pitera	Respond to of 86076

If only those Japanese would consume more... Japan's Current-Account Surplus Soars; Drop in Imports May Raise Trade Tensions March 15, 1999 By BRIAN FOWLER Dow Jones Newswires TOKYO-A sharp decline in imports helped boost Japan's current account surplus by 72% in January, compared with a year earlier. Analysts said the figures are likely to put further pressure on Japan to spur domestic demand for the sake of the global economy. The Ministry of Finance said Monday that the nation's current account surplus rose to 807.5 billion yen ($6.80 billion), as a 25% drop in imports to 2.404 trillion yen more than offset an 11% decline in exports to 3.331 trillion yen. Japan's unadjusted surplus in trade and services skyrocketed 1,989% to 425.4 billion yen in January. The figures are likely to spark fresh calls on Japan to boost domestic demand, as the plunge in imports highlights the nation's inability to absorb products from struggling economies across Asia. U.S. officials recently have said that Japan is the only industrialized nation to have seen its trade surpluses rise sharply since financial turmoil first erupted in Thailand in the summer of 1997. As the crisis spilled over into other emerging markets in Asia and elsewhere, the U.S. suffered a dramatic deterioration in its balance of payments. U.S. Economy Remains Robust But some analysts said the figures aren't expected to cause trade friction as long as the U.S. economy remains robust. "I don't think we'll see trade friction unless the U.S. economy slows sharply," said Akio Yoshino, an economist at Credit Suisse Asset Management in Tokyo. "The shorter New Year's holiday [in Japan this year] meant there was more time to produce and more time to export and less time to consume," the economist added. Also, the current account surplus was lower that expectations. Economists expected Japan's surplus to total 825.0 billion yen in January, compared with the same month a year ago. The current account is the difference between the nation's income from foreign sources and foreign obligations payable, excluding net capital investment. Support for the Yen In addition, the January data showed a net inflow of 518.5 billion yen in the financial account, compared with a net outflow of 768 billion yen in the same month a year ago, reflecting growing interest in Japanese financial assets among foreign investors. Portfolio investment registered net inflows of 1.215 trillion yen, compared with a net outflow of 499.6 billion yen in January of 1998. Matthew Poggi, an economist at Lehman Brothers in Tokyo, said strong investment flows into Japan are lending support to the yen Despite new measures to ease monetary conditions since mid-February, the yen has remained relatively strong. Japanese officials have indicated that they don't want to see the yen rise against the U.S. dollar. On Monday, Eisuke Sakakibara, Japan's vice finance minister for international affairs, said that an excessively strong yen is undesirable now. "At this point, excessive yen strength is undesirable. The Bank of Japan also understands this," Mr. Sakakibara said. The dollar averaged 113.18 yen in January, down sharply from 129.45 yen a year ago. In early Monday trading in Tokyo, the dollar was quoted at 119.15 yen.