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Last Updated: Wednesday, 23 June, 2004, 06:23 GMT 07:23 UK
Japan trade surplus rises again
A Japanese-made high speed train is unloaded in Taiwan
Demand in Asia is driving Japanese trade
Official figures have revealed a further jump in Japan's trade surplus, in a sign that the country's export-led recovery is still going strong.

The value of Japan's exports exceeded that of its imports by 934 billion yen ($8.6bn) in May, a 35% increase on the year, the finance ministry said.

Japan's trade surplus has now risen for 11 months running, helped by a recovering world economy.

The latest increase reflects strong demand for cars and digital cameras.

The figures for May confirmed the importance of other Asian countries to Japan's export-oriented economy.

The value of Japan's exports to the rest of Asia rose by 17.5% on the year to 2.3 trillion yen, or 49% of total export revenues.

China watching

Exports to Europe also grew, rising 5.6% to 729 billion yen.

Exports to the US, meanwhile, fell 7% on the year to just over 1 trillion yen.

The decline in the value of US-bound exports reflected a growing trend for Japanese companies to export to the US via their subsidiaries in China.

Analysts said the export boom would continue for the next few months, buoyed by sustained demand from China and other fast-growing Asian economies.

However, they warned that credit-tightening measures introduced by the Chinese government in an effort to prevent the economy from overheating could hinder Japan's export performance towards the end of the year.

"Considering imports are not likely to drop as much as exports, Japan's trade surplus will shrink," said Tomomichi Akuta, an economist at UFJ Institute.

Japan emerged from a ten-year period of stagnation in late 2003 as a weak yen combined with China's economic boom and a recovery in the US to generate a surge in export sales.

There is evidence that the export boom is now spilling over into the wider Japanese economy, holding out the prospect of a sustained rebound.

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