-Caveat Lector- >From Int'l Herald Tribune <Picture: [ Monday | Tuesday | Wednesday | Thursday | Friday | Saturday ]> ------------------------------------------------------------------------ Paris, Tuesday, February 23, 1999 Trade Surplus Soars 87%As Recession Grips Japan ------------------------------------------------------------------------ Compiled by Our Staff From Dispatches ------------------------------------------------------------------------ TOKYO - Japan's trade surplus soared 87 percent in January from the same month last year as the nation's recession crushed demand for imports, the government announced Monday. At the same time, Japanese exports to the United States and Europe fell, particularly U.S. exports of steel that have been at the center of a growing trade dispute with Washington. The merchandise trade surplus, the measure of all goods exported by Japan minus those imported, grew to $6.28 billion for the first month of the year, the Ministry of Finance said. The trade surplus with the United States decreased 2.2 percent in January, to $4.03 billion, the ministry said. The overall trade surplus, which was higher than expected, ''reflects the severity of Japan's depressed domestic demand,'' said Satoru Ogasawara, economist at Credit Suisse First Boston, blaming the deepest recession since World War II. ''The gap between exports and imports will continue to grow since the yen is now heading toward 125 yen level,'' Mr. Ogasawara warned. Imports and exports both fell, as collapsing demand at home coincided with fading demand in the United States and Europe. While exports tumbled 10.6 percent to 3.45 trillion yen ($28.8 billion), imports fell 22.1 percent to 2.69 trillion yen, the Finance Ministry said. ''This month's surplus was mainly due to a heavy drop in imports as the Japanese market could not absorb goods from Asia because of the prolonged stagnation of domestic demand,'' a Finance Ministry official said. Measured on a monthly basis, Japan's merchandise trade surplus surged 33 percent in January from December. The steady climb in the surplus reflects consumers' reluctance to spend amid Japan's worst recession in decades. That has cut demand for imports and made Japanese manufacturers increasingly reliant on sales overseas. Japan has been under heavy pressure from the United States and other trading partners to rein in the surplus by bolstering its weak economy and spurring demand for imports. Exports had increased in the three quarters through September as strong sales of steel to the United States and of cars to Europe offset plunging shipments to Asia. In the fourth quarter, though, exports fell because of waning U.S. and European demand. ''The Japanese export environment is clearly deteriorating,'' said Yoshito Sakakibara, an economist at Goldman Sachs. ''Exports to Europe are deteriorating significantly'' because of the slowdown in the European economies, Mr. Sakakibara said. In January, exports to the 15 member countries of the European Union fell 1.4 percent, from the month before, the first decline in 25 months. Japan's trade surplus rose 40.1 percent in 1998 from the previous year to a record $121.8 billion, while the country's surplus with the United States rose 33.4 percent to $58.3 billion Industrial output in Japan has fallen eight of the past 12 months as companies cut production because of weak consumer demand. Household spending in Japan fell 2.2 percent in 1998 as rising unemployment and falling incomes caused consumers to increase savings. The fall in consumer spending, which accounts for 60 percent of the economy, helped push the nation into its worst recession in more than 50 years. The government expects the economy to shrink 2.2 percent in the year through March, yet grow 0.5 percent the following year. Separately, the Finance Ministry reported that Japanese steel exports to the United States plunged more than 25 percent in January compared with a year earlier. Japanese steelmakers, anticipating the imposition of punitive tariffs by the U.S. Commerce Department, cut exports of steel to the United States in January by 28.7 percent in value and 25.4 percent in volume from the same month a year earlier. Japan's steel exports have become a major trade conflict between the two countries since the U.S. steel industry accused Japanese companies of dumping low-priced steel in the United States. U.S. steelmakers such as Bethlehem Steel Corp. accused Japanese competitors of dumping, or selling products at below the cost of production. ------------------------------------------------------------------------ <Picture> ~~~~~~~~~~~~ A<>E<>R The only real voyage of discovery consists not in seeking new landscapes but in having new eyes. -Marcel Proust + + + + + + + + + + + + + + + + + + + + + + + + + + + + Every great advance in natural knowledge has involved the absolute rejection of authority. -Thomas Huxley + + + + + + + + + + + + + + + + + + + + + + + + + + + + Forwarded as information only; no endorsement to be presumed + + + + + + + + + + + + + + + + + + + + + + + + + + + + In accordance with Title 17 U.S.C. section 107, this material is distributed without charge or profit to those who have expressed a prior interest in receiving this type of information for non-profit research and educational purposes only. 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