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Last Updated: Thursday, 22 February 2007, 10:46 GMT
Cheaper oil lifts Japanese trade
oil installation
Cheaper oil reduced the value of Japan's imports
Japan recorded a trade surplus of 4.4bn yen ($36m; 19m) in January, reversing a deficit of 354bn yen a year ago.

Falling import values as a result of cheaper oil, together with strong exports because of the weak yen, helped to push trade into the black.

There were also special factors, such as the Lunar New Year holidays in China starting later than last year.

On Wednesday, the Bank of Japan took advantage of the strengthening economy and raised interest rates to 0.5%.

There was some cause for concern in the detail, with the growth in exports to the United States slowing sharply as the US economy cools.

Exports to the US grew 5.5%, compared with 21.7% in January 2006.

Weak yen

There was good news for Japanese exporters as the euro hit record levels against the yen.

The euro peaked at 159.13 yen, its highest level since the currency was launched in 1999, before falling back slightly.

It follows comments from Bank of Japan governor Toshihiko Fukui who said that the central bank would raise interest rates only gradually.

The Japanese currency also weakened against the dollar. Exporters were among the big gainers in Tokyo, as the Nikkei average closed above 18,000 for the first time since May 2000.

Japan ups interest rates to 0.5%
21 Feb 07 |  Business
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