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Japan trade hits record surplus

Diane Coyle
Monday 17 May 1999 19:02 EDT
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JAPAN'S trade surplus reached a record 15.2 trillion yen (pounds 76bn) in the last fiscal year. However, its 18 per cent increase compared with the previous year is a measure of the catastrophic weakness, not strength, of the economy.

Exports declined by 4.5 per cent to 47.6 trillion yen, but imports tumbled by 13 per cent to 31.6 trillion yen due to depressed demand on the part of both companies and household consumers.

Officials at the Finance Ministry in Tokyo predicted yesterday that the surplus would decline in the current fiscal year. While this would help sensitive bilateral trade relations with the United States, the change is likely to come from a further slowdown in exports as much as any recovery in imports.

Many economists believe the economy has at last stabilised, although a supplementary budget to further boost demand is widely thought necessary. Tomoko Fujii, a senior economist at Nikko Salomon Smith Barney, said: "The question is how long the effects of past stimuli will be sustained. We assume a further stimulus will be needed in the latter half of this business year."

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