Japan logs 1st trade deficit in 26 yrs in Aug. except Jan

TOKYO, Sept. 25 Kyodo - Japan posted a trade deficit of 324.0 billion yen in August, the first red ink figure in nearly 26 years except for January when a seasonal factor often causes a deficit, due to unabated surges in energy prices and the U.S. economic slowdown, the Finance Ministry said Thursday.

The soaring energy import prices overwhelmed growth in exports, which was
meager as shipments bound for the United States, hit by the subprime mortgage
crisis, posted the largest decline since comparable monthly trade data became
available in January 1980.
Excluding the month of January when exports tend to slow due to the halt in
business during the New Year holidays, Japan last logged a trade deficit in
November 1982.
In November 1982, Japan's export growth was capped due to the nation's trade
friction with the United States, while imports expanded due to high crude oil
prices after the second oil crisis and the yen's weakness against other major
currencies, according to the ministry.
In the reporting month, exports gained 0.3 percent to 7,055.9 billion yen for
the second consecutive month of rise, led by growing steel and light diesel oil
shipments to the rest of Asia, the ministry said in a preliminary report.
Imports advanced 17.3 percent to 7,379.9 billion yen, up for the 11th straight
month, on continued jumps in crude oil, coal and liquefied natural gas prices,
the ministry said.
Crude oil imports increased 64.3 percent and those of coal and liquefied
natural gas surged 121.2 percent and 53.1 percent, respectively.
In August, the average price of oil hit yet another all-time high of $135.0 a
barrel, up 86.9 percent from a year before, the ministry said.
Economic and Fiscal Policy Minister Kaoru Yosano told a press conference that
the August trade deficit was caused by the U.S. economic downturn.
''I expect it will only be a temporary phenomenon and believe that the Japanese
economy has not been seriously ill,'' Yosano said.
Yasuo Yamamoto, senior economist at the Mizuho Research Institute, said that
Japan's trade balance will soon swing into surplus because crude oil prices
have peaked out in global markets, but that the country's export growth will be
capped.
''I expect Japan's exports will remain weak until the end of next March because
of slumping U.S. demand for automobiles and receding demand for information
technology devices in newly industrializing Asian economies such as South
Korea, Taiwan and Singapore,'' Yamamoto said.
By region, the trade surplus with the United States fell 48.2 percent to 371.1
billion yen, down for the 12th straight month.
As the U.S. economy continued to slow due to the subprime woes, Japan's exports
to the country dropped a record 21.8 percent to 1,087.2 billion yen, down for
the 12th straight month.
Exports of automobiles contracted 30.1 percent and those of auto parts
decreased 25.7 percent.
Imports from the United States were up 6.4 percent to 716.1 billion yen led by
aircraft and cereals.
Japan's trade surplus with the rest of Asia expanded 18.1 percent to 995.5
billion yen for the second straight month of increase.
Exports expanded 6.7 percent to 3,713.9 billion yen for the 78th straight month
of growth, led by light diesel oil and steel products.
Imports rose 3.0 percent to 2,718.4 billion yen, up for the third consecutive
month, with gains in liquefied natural gas and petroleum product imports.
Japan posted a trade surplus of 10.8 billion yen with China, excluding Hong
Kong and Macao, for the first growth in about 15 years when the months of
February and March are excluded. In February and March, imports from China tend
to slow due to the Lunar New Year holidays.
Exports to mainland China rose 8.8 percent to 1,223.4 billion yen for the 39th
straight month of increase, on expansion in light diesel oil and steel.
Japanese exports to mainland China exceeded those to the United States for the
second straight month, indicating closer Japanese trade ties with the rapidly
growing economic power.
But imports fell 4.8 percent to 1,212.7 billion yen, down for the first time in
three months, with declines in clothing and computer parts.
Japan's trade surplus with the European Union grew 6.2 percent to 332.7 billion
yen for the second consecutive month of rise.
Exports to the 27-nation bloc fell 3.5 percent to 951.2 billion yen and imports
dropped 8.1 percent to 618.4 billion yen.
The trade data are measured on a customs-cleared basis before adjustments for
seasonal factors.
==Kyodo