Japan's trade surplus soared 71.4 percent in June year-on-year, highlighting an economic recovery heavily dependent on exports as weakened demand at home continued to drive imports downward.
Analysts said the ballooning trade surplus, announced by the government yesterday, highlighted the fragility of the nation's recovery. Exports to Asia surged, while those to Europe rose moderately and those to the US inched down. Overall exports rose 8.9 percent from a year ago.
Japan's global trade surplus totaled ?1.30 trillion (US$11 billion), up from ?759 billion (US$6.5 billion) last June, according to the Finance Ministry. That figure was greater than the ?1.06 trillion (US$9 billion) expected by economists surveyed by Dow Jones Newswires and Nikkei News.
A 5.1 percent fall in imports was critical in lifting the trade surplus. Japan's trade surplus with the US increased 5.6 percent to ?617.4 billion (US$5.3 billion), compared to a year ago. Japan's trade surplus with Asia soared 135.8 percent to ?650.5 billion (US$5.6 billion).
Takeshi Minami, senior economist at UFJ Tsubasa Securities Co in Tokyo, said the trade surplus was likely to grow further because hopes remained dim for a rise in imports.
For the first six months of the year, the trade surplus jumped 56.8 percent to ?4.99 trillion (US$42.6 billion) from ?3.38 trillion (US$28.8 billion), marking the first increase for the period in three and a half years.
Exports in the January to June period edged up 1.6 percent, while imports dipped 6.5 percent.
"The scale of the Japan surplus surpassed market expectations," said Kunji Okue, economist at Dresdner Kleinwort Wasserstein in Tokyo.
Car exports have been climbing to Europe, while exports to Asia are up in a wide range, including computer chips, electronic components, machinery and chemical products, he said.
The looming trade imbalance was likely to push the Japanese yen higher, which could endanger an export-dependent growth in the long run, Okue said. A weakening dollar is certain to push down the earnings of Japanese companies that rely on exports.
The dollar has recovered this week to ?117 levels after dropping below ?116 on fears about US accounting scandals, the plunge on Wall Street and the slowing pace of America's recovery. But it is still trading below the ?130 levels of earlier this year.
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