Japan's annual trade surplus with the rest of the world has risen for the first time in five years, by almost 49 per cent.

As the yen has grown weaker, Japanese products, especially cars, have become much cheaper for buyers in other countries.

This is likely to intensify friction over trade between Japan and its main trading partners, who fear that Japan may be trying to export its way out of recession.

Japanese car exports are doing well

Japanese officials are keen to play down the increase. A Japanese government spokesman said the rise was a temporary phenomenon, caused by the weakness of the Japanese currency, which has fallen by over a quarter of its value in the last year, and by concerns about the financial system.

Earlier this week the United States urged Japan to take further steps to reduce the trade surplus and increase domestic demand.

Implications for Asian economic crisis

Imports to Japan, particularly from Asia, have suffered recently, and Washington has expressed concern that the trade imbalance will have an adverse effect on economic recovery in Asia.

The American Treasury Secretary, Robert Rubin, said Japan had a crucial role in resolving the economic crisis in south-east Asia.

The BBC's Tokyo correspondent, Juliet Hindell, says the Japanese government has announced a series of measures to stimulate the economy, but few will have an immediate impact.

She says that, for the time being at least, Japanese exports to the rest of the world are likely to keep rising.

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