Japan's Trade Surplus Soars As It Cuts Back On Oil Habit

Increasing by more than 50%, Japan's trade surplus soared in November. Growing energy efficiency helped cut the oil import bill for the first time in two-and-a-half years, the government said Dec. 21. The world's second largest economy also exported more cars and steel, showing that a feared slowdown on the U.S. economy has not yet hit Japan, analysts said.

The trade surplus jumped to 915.9 billion yen (US$7.73 billion) in November, a 54% gain year-on-year and well ahead of market forecasts for about 599 billion yen. Exports were up 12.1% from a year earlier to 6.63 trillion yen while imports climbed 7.5% to 5.72 trillion yen.

"It was the decrease of oil imports," a finance ministry official said in explaining the surprise jump in the trade surplus. The price tag for oil, the largest imported item for resource-poor Japan, was down 6.6% year-on-year, the first drop in 30 months, the official said on the customary condition of anonymity. Japan imported 11.2% less oil last month than in November 2005, marking the seventh consecutive month of decline, he said.

"We presume that the demand for oil itself is becoming smaller because of more fuel-efficient automobiles," he said. "Small cars are taking a larger share in the market as well." Fuel-efficient cars have been major hits for Japanese automakers, particularly in the key U.S. market where domestic rivals have been slower to catch on.

Exports to the U.S. climbed 8.6% year-on-year in November with auto shipments up 27.7%. Japanese imports from the world's largest economy gained 9.5%.

Exports to China climbed 19.5% -- the 18th consecutive monthly increase -- on booming sales of semiconductor chips and electronics parts, the ministry said. Imports from China increased 12.2% on demand for such items as clothing and metal products. Exports to other Asian nations rose 10.6% to 3.13 trillion yen, with imports up 11.2% to 2.62 trillion yen, widening the surplus 7.1% to 503.3 billion yen. Exports to the EU rose 12.9%, expanding the trade surplus by 50.8% to 340.1 billion yen.