By Yoko Nishikawa
TOKYO, Feb 25 - Japan had a trade surplus of 188.1 billion yen ($1.40 billion) in January, helped by growing demand from the United States, which raised hopes that overall Japanese exports could be heading for a recovery.
The customs-cleared trade surplus contrasted with a rare deficit of 95.7 billion yen in January 2001, according to Ministry of Finance data published on Monday.
The data come as welcome news to Japan's policymakers, who are piecing together an anti-deflation package in the face of slumping share prices and grim economic indicators.
Japan's usual monthly trade surpluses have shrunk over the past couple of years, hurt by a slowdown in world economies.
Even though exports were down by 1.8 percent in value year-on-year in January and by 1.9 percent in volume, those falls were much smaller than in other months since mid-2001.
In January, Japan's surplus with the United States, its largest trading partner, rose 14.9 percent year-on-year to 524.8 billion yen -- the first year-on-year rise in five months.
"The surplus was slightly larger than our expectations as automobile exports to the United States were quite firm," said Minako Iida, economist at Deutsche Securities.
"Although it is difficult to assess the trend from one month's data, the trade surplus will likely grow over the medium term as exports are expected to bottom out on brighter prospects for economic recovery in the United States and Asia."
A government official said automobile exports rose 24.8 percent year-on-year in value.
Japan's exports have been hit hard over the past year by a global economic slowdown that began with a slump in high-tech demand and was exacerbated by the September 11 attacks in the United States. Its customs-cleared trade surplus slid 38.3 percent in 2001, its biggest drop since 1970 and the third year of decline.
BOTTOMING OUT?
A budding recovery in the U.S. economy and the yen's depreciation against the dollar over the past few months have been helping the country's exports.
Susumu Okano, chief economist at Daiwa Institute of Research, said: "The main point was that exports...rose, indicating that a fall in exports has stopped and alleviating concerns after poor December figures."
"The overall trade surplus will likely be on a growing trend over the next six months," Okano said.
With domestic demand still extremely weak, exports are seen as the best way for Japan to pull out of its long economic slump.
The government is due to announce its anti-deflationary package on Wednesday and the Bank of Japan's Policy Board meets the following day amid calls for further easing, but neither seems likely to have anything up their sleeve capable of turning round the economy quickly.
On a seasonally adjusted basis, January's trade surplus rose 40.1 percent from December, with exports gaining 8.5 percent.
The ministry used a dollar rate of 131.00 yen to calculate January data compared with 115.19 a year earlier and 124.54 yen in December.
The yen has fallen about 13 percent against the dollar since mid-September.
However, a Finance Ministry official said it was difficult to assess the impact of the yen's fall on the trade balance at this point. The effect of currency movements on trade data tends to lag by some months.
"The yen's recent weakness is expected to be positive for Japan's exports, but I think the key for the trade surplus going forward would not be foreign exchange levels but rather a recovery in offshore economies," said Tetsuro Sawano, senior economist at Tokyo-Mitsubishi Securities.
Reflecting the weak domestic economy, customs-cleared imports of crude oil in January totalled a preliminary 316.561 billion yen ($2.36 billion), down 23.0 percent from a year earlier. The volume of January crude imports fell 10 percent from a year earlier to 19.941 million kilolitres.