Japan's trade surplus soars in first half

July 26, 2007 - 0:0

TOKYO (AFP) -- Japan's trade surplus jumped nearly 60 percent in the first half to June, lifted by robust shipments of cars and steel as well as a decline in oil import costs, the government said on Wednesday.

In June alone, the trade surplus jumped by over 50 percent, helped by the weakness of the yen which analysts said should continue to support export revenues in the second half of 2007. Japan's trade surplus was up 59.3 percent for the six months to June to 5.13 trillion yen (43 billion dollars), the finance ministry said. Exports rose 12.8 percent to 40.37 trillion yen while imports gained 8.2 percent to 35.23 trillion yen. The ministry said the bigger surplus was mainly due to robust exports of cars, steel and semiconductors, while a fall in crude oil imports offset increased imports of telecommunication equipment and non-ferrous metals. Shipments of automobiles -- a crucial Japanese product -- gained 17.7 percent to 6.78 trillion yen while steel shipments jumped 22.1 percent to 1.99 trillion yen. Crude oil imports fell 4.3 percent to 5.42 trillion yen. ""The yen's depreciation also contributed to the surplus considerably,"" said Keiji Kanda, an economist at Daiwa Institute of Research. The dollar traded at 119.65 yen on average over the six months, down 3.3 percent from the same period last year, helping to strengthen the competitiveness of Japanese goods overseas. ""The surplus is expected to grow steadily for the second half as the US economy is unlikely to fall into recession in the short-term. However, prospects for the surplus are uncertain for next year as the possibility is high that the US economy will slow down,"" Kanda said. The surplus with the United States for the six months fell 2.6 percent. With the rest of Asia it jumped 37.6 percent and with the European Union it gained 23.0 percent. The trade deficit with China shrank 17.6 percent. Japan's trade surplus in June alone rose 53.4 percent from a year earlier to 1.23 trillion yen thanks to strong exports of cars, ships and steel which helped to offset a rise in oil import costs. It was the eighth straight month of gains and much better than the market's forecast for a surplus of 970 billion yen. ""The surplus remains firm despite a turnaround in oil prices, suggesting Japan's exporters continue to draw support from the weak yen,"" noted Barclays Capital's chief economist in Tokyo, Takuji Aida. Exports rose 16.2 percent in June to 7.28 trillion yen while imports increased 10.7 percent to 6.06 trillion, the ministry said. The surplus with the United States in June rose 7.8 percent, the first gain in three months. The trade surplus with the rest of Asia jumped 34.8 percent, a fourth straight year-on-year gain, while its trade deficit with China shrank 36.1 percent. The surplus with the EU increased 19.9 percent