Tokyo, Dec. 11 (Bloomberg) -- Japan's current account surplus widened in October as flagging consumer spending sapped demand for imported goods while exports rose. The surplus widened to 1.17 trillion yen ($9.4 billion) from 1 trillion yen in September, seasonally adjusted, Ministry of Finance figures showed. Economists had expected the surplus to widen to 1.37 trillion yen, according to the median of 11 forecasts in a Bloomberg news survey. Consumer demand is falling in the world's second-largest economy as companies such as Advantest Corp. and Sanyo Electric Co. cut jobs and wages, pushing unemployment up to a record high. That's curbing demand for imported goods, suggesting that Japan's economic growth is slowing. ``The fall in imports suggests that domestic demand is very weak,'' said Richard Jerram, chief economist at ING Securities (Japan) Ltd. At the same time, ``the trend for exports is basically going sideways, meaning that the main dynamic for overall growth is going to dry up.''
Imports in October fell 3.2 percent from September to 3.14 trillion yen, seasonally adjusted, the ministry said. Exports rose 3.2 percent to 4.23 trillion yen. From a year earlier, the current account surplus rose 24 percent to 936 billion yen. Japanese stocks rose, led by exporters such as Sony Corp., after U.S. reports on business spending raised optimism that demand in Japan's biggest overseas market may improve next year. The Nikkei 225 Stock Average rose 0.6 percent to 8854.09 as of 11 a.m. in Tokyo. Japan's economy may be headed for its fourth recession in a decade, economists say. Growth in the third quarter slowed to 0.8 percent from 0.9 percent during the previous three months. Exports, which accounted for half of second-quarter growth, slowed to a gain of 0.6 percent in the third quarter from 5.9 percent.
Job Cuts
Slowing overseas sales prompted Advantest, the biggest maker of memory-chip testing machines, to cut 600 jobs in hopes of saving 10 billion yen annually in labor costs. Such job cuts helped push the unemployment rate to 5.5 percent in October, matching last December's record. Falling wages are also denting consumer demand. Sanyo Electric, the world's biggest maker of mobile-phone batteries, said it would cut wages by as much as a third in home appliance manufacturing and transfer about 1,400 workers in the division to other units. Japanese household spending in October fell 2.3 percent, seasonally adjusted, following a 5.4 percent increase in September, the government's statistics bureau said last week. Flagging consumer spending is prompting companies such as Matsushita Electric Industrial Co., the world's biggest consumer electronics maker, to cut profit forecasts. //www.quote.bloomberg.com