Japan's trade surplus falls to 4-year low

Japan’s trade surplus falls to 4-year low

Japan's Finance Ministry disclosed that the country's trade surplus shrank 68.3% year on year to Yen 296.99 billion (around $2.7 billion) in May. This is the sharpest decline since May 2001, when it plunged 86.8%. Exports in May rose only 1.4% to Yen 4.8 trillion due to 10.1% decline in semiconductors and other electronics shipments coupled with a 34.6% drop in ship deliveries. Imports jumped 18.6% to Yen 4.5 trillion as the crude oil imports rose 64.9% and petroleum products imports jumped 72.6%. Following the trade surplus news, the Yen fell from its highest point in almost two weeks against the US Dollar. The Yen also fell against the Euro, Swiss Franc, British Pound and Canadian Dollar. Economists indicate that slack demand from China and the US will likely affect the Japanese economy. However, they added that there is no risk of falling back into recession. The Japanese economy, the world's second-largest economy, started to recover this year after contracting in the middle of 2004. It saw a strong growth rate of 1.2% during the January-March 2005 period. For May, Japan's trade surplus with Asia plunged 40.2% to Yen 354.7 billion, with exports rising 1.5% and imports expanding 15.8%. With China alone, Japan's trade deficit doubled to more than Yen 265.2 billion as exports fell 0.1% and imports climbed 18.9%.