22 July 2004, 09:45  Japan June trade surplus up for 12th straight mth

Japan's trade surplus rose in June for the 12th consecutive month, government data showed on Thursday, helped by strong exports of parts for mobile phones and equipment related to semiconductors. Economists also pointed to signs of rising imports, saying it could mean Japan's domestic demand is strengthening. The customs-cleared trade surplus for June was up 36.9 percent from a year earlier at 1.147 trillion yen ($10.44 billion), the Ministry of Finance said. The figure was lower than the median forecast of 1.2933 trillion yen in a poll of 26 economists. "The headline surplus was rather lower than we had expected, but I think there is an encouraging sign in the export growth," said Richard Jerram, economist at ING. "It's also fairly encouraging that imports are showing some signs of increasing -- so far in this cycle imports had been quite soft -- but imports are picking up and that could be a sign that domestic demand is getting stronger as well."
Brisk exports have been a major contributor to Japan's recent recovery. Exports for June increased from a year earlier for the 7th straight month, rising 19.4 percent to 5.2879 trillion yen. But compared with May exports were down 1.9 percent, a possible sign of slowing in overseas economies. Imports were up 15.3 percent from a year earlier at 4.1409 trillion yen, helped by imports of crude oil and coals. Imports increased 6.0 percent month-on-month. "Imports turned out to be a bit higher than we had forecast and that's why the trade surplus looks a bit low. Exports are still quite strong," said Yoshimasa Maruyama, a senior economist at Mizuho Research Institute. "But the surplus may weaken a bit over the coming months as exports cool down due to more moderate demand from the U.S. and China, and domestic consumption recovers further," he added.
Supported by rising exports and a pickup in capital spending and personal consumption, Japan's economy grew at an annualised pace of 6.1 percent in the January-March quarter -- its best showing in more than a decade. With the world's second-largest economy continuing to show a healthy performance in recent months, the government on Wednesday almost doubled its economic growth forecast for the fiscal year to next March, bringing its view in line with the market consensus. The Cabinet Office said in its latest forecast that real growth, which takes into account price changes, could be 3.5 percent this fiscal year, which would be its fastest pace in eight years. Its earlier growth forecast was 1.8 percent. Despite some economists' concern about a slowdown in the U.S. economy, Japan's exports to the United States in June rose 10.9 percent from a year earlier, the first rise in three months. The trade surplus with the United States, Japan's largest trading partner, was up 19.9 percent from a year earlier at 577.36 billion yen, rising for the first time in four months. With China, Japan had a trade deficit of 113.017 billion yen. That was down 26.7 percent from a year earlier. Imports from China were up 22.0 percent from a year earlier, while exports rose 36.3 percent. Japan imports more from China than anywhere else, and China is Japan's second-largest export market after the United States.///

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