Japan’s trade surplus shrinks as exports slow
The merchandise trade surplus recorded its lowest level since January 1996, falling from Y575.0 billion in May 2000 to Y80.1 billion ($652 million). Japan's surplus with the United States, its largest trading partner, fell 15.9 percent year-on-year to Y390.6 billion, while its surplus with Asia plunged by a massive 84.1 percent.
Economists attribute the figures to the combined effects of the continuing slowdown in the US economy and the price-attractiveness of cheap Asian imports. Though demand at home remained weak, imports from Asia nevertheless continued to surge on the back of greater market access and deregulation. And although a high proportion of these imports were sourced from the growing band of Japanese businesses that have moved their production offshore, the fact that most of the capital expenditure involved was also made offshore meant they had little benefit for the Japanese economy. Total imports jumped 14 percent to Y3.73 trillion while exports continued to decline, falling by 0.9% - the second straight decline in value terms – to Y3.82 trillion.
Though experts view Japan’s declining trade surplus as a long-term trend, they also expect the situation to improve in the latter part of 2001 as the U.S. economy begins to recover.
