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Japan trade surplus basically declining -- MOF

TOKYO: Japan's overall trade surplus is now basically on a declining trend, a Ministry of Finance (MOF) official told a news conference.

"Basically, the trade surplus is on a declining trend," he said.

Asked whether the recent weakness in the yen will affect the speed of the decline in the surplus, he said: "Yes, it could affect the surplus, but there are other variables too."

"I hope the implementation of the economic measures to cope with the high yen will help shrink the trade surplus," he said.

Earlier, MOF announced that Japan's overall customs-cleared trade surplus narrowed to $9.43 billion in July from $12.25 billion a year earlier.

The country's politically sensitive trade surplus with the United States also narrowed to $3.87 billion from $5.62 billion a year earlier, it said. The figures were not adjusted for seasonal factors.

The MOF official said the overall dollar-based trade surplus shrank year-on-year for the first time in three months.

With the U.S., the trade surplus has narrowed in dollar terms for two consecutive months, the official said.

Asked why the overall dollar-based trade surplus had narrowed in July, the MOF official said: "The growth in imports is larger than growth in exports."

Overall, dollar-based exports grew 10.3 percent year-on-year in July while imports grew 28.6 percent.

The MOF official attributed a drop in exports to the U.S. in particular, mainly to a decline in exports of Japanese cars.

"The high yen is making Japanese cars less price-competitive," he said.

He added that Japanese car makers are stepping up local production in the United States and that car demand in the United States is sluggish.

Asked whether the U.S.-Japan car trade dispute had contributed to the drop in Japanese car exports to the United States, the MOF official said that the effect of the dispute seemed to have ceased by the end of June.-Reuter