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Thursday, 20 June, 2002, 05:36 GMT 06:36 UK
Trade boost for Japan's economy
Japanese shoppers in Tokyo
Japanese shoppers don't flock to foreign goods anymore
Exports from Japan have soared a massive 715% during May - nearly double the amount expected by forecasters.

The export boom was driven by soaring demand across Asia for Japanese hi-tech products like computer chips and flat screen television sets. Japan's trade surplus - the value of its exports minus the amount of goods it imports - now stands at 619.2bn yen ($5bn) - up from a 344.5bn surplus in April.

It is the fifth month of rising exports, and a sign of the continuing recovery of an economy that until very recently was mired in its deepest recession since World War II.

However, the trade surplus is also a sign for continued weak demand for foreign goods from Japanese consumers, which suggests a split economy of booming exports and little economic activity at home.

Another reason for the booming trade is the continued relative weakness of the yen, which makes Japanese products cheap around the world, but foreign goods prohibitively expensive.

Japan's currency has managed to recover some of its poise in recent weeks, but not enough to harm the export industry.

China first

One of the fastest growing markets for Japanese goods was China. Exports to this country jumped by more than a quarter.

South Korea was another top market, with a 22.8% growth rate for exports.

Even US importers have rediscovered their appetite for Japanese products, as that country's continues to emerge from its post-September 11 recession. Japanese exports to the US grew 5.5%, the first year-on-year gain over the past 14 months.

The trade surplus with the US, though, grew 33.7% to 519.6bn yen, which in turn could lead to ructions with the Washington government. US officials have repeatedly voiced concerns over the weakness of the yen.

The only black spot was Western Europe, with the value of goods shipped there sliding by 2.4%.

Mamoru Yamazaki of Barclays Capital said he expected the surplus to keep expanding - "from both sides: strong exports and weak imports".

Takeshi Minami concurred: "Imports are likely to stay subdued given the weak consumption and capital investment here."

Exports, he said, were also driven by the economic recovery in Asia.


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