Tokyo, Aug. 22 -- Japan's trade surplus shrank more than expected in July as the yen's 11 percent gain this year cut into the value of exports by companies such as Fujitsu Ltd. and Teac Corp. The surplus fell in July to 674.4 billion yen ($5.68 billion), seasonally adjusted, from 1.04 trillion yen in June, a Finance Ministry report showed. Economists surveyed by Bloomberg News had forecast a 770.1 billion yen surplus. The yen's gains reduced the value of car and computer-part shipments from the world's second-largest economy, pushing exports down 0.5 percent from June. Concerns that falling overseas sales threaten Japan's recovery from recession pushed five-year bond yields to a record low.
``Exports will slow,'' said Yoshimasa Maruyama, an economist at Mizuho Research Institute. ``Production is starting to slacken, and information technology companies are lowering their forecasts. For this year it's nothing to worry about, but it may have an effect next year.''
Applied Materials Inc., the world's biggest maker of semi- conductor manufacturing equipment, said earlier this month that orders this quarter may drop 15 percent from last quarter, a sign that demand may fall for Japanese-made computer chips. Fujitsu, the world's third-largest maker of memory chips for mobile phones, last month lowered its full-year sales forecast by 3.8 percent on concern sales of communication equipment and software revenue from the U.S. won't meet expectations. //quote.bloomberg.com