Japan's Trade Surplus In May Suffers Biggest Drop In Four Years

Japan's trade surplus in May posted its biggest drop in four years as slack exports raised concerns about sustained growth and record oil prices boosted the import bill, official figures showed June 22.

The May surplus came in much weaker-than-expected at 296.99 billion yen (US$2.7 billion) in May, down 68.3 % from a year earlier for the sharpest decline since May 2001, when it shrank 86.8%, the finance ministry said.

Exports in May stood at 4.8 trillion yen, up just 1.4%, with shipments of semiconductors and other electronics parts falling 10.1% and ships tumbling 34.6%.

Imports jumped 18.6% to 4.5 trillion yen as the crude oil import bill rose 64.9% and petroleum products jumped 72.6%.

"Export growth is slowing, especially for Asia," said Toshio Sumitani, economist at Tokai Tokyo Research Center. "Slack demand from China or the Untied States ... will likely affect the Japanese economy," he said, while adding that there was no risk of falling back into recession.

The world's second-largest economy has been recovering this year after contracting in the middle of 2004. It showed strong 1.2% growth in the January-March quarter for an annualized rate of 4.9%.

Copyright Agence France-Presse, 2005

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