TOKYO (MNI) – Japan’s trade surplus expanded 2.7% in October from a
year earlier to Y821.9 billion ($9.9 billion), slowing notably from the
revised 52.8% growth posted in September, Ministry of Finance data
released Thursday showed.

The headline number came in below the median of a Market News
International survey, which forecast a surplus of Y875.7 billion.

The pace of export growth on a year-on-year basis also decelerated
for an eighth consecutive month, as shipments to the European Union fell
for the first time in 11 months and while the growth in exports to the
United States moderated.

Still Japan has posted a trade surplus for 19 months in a row since
the country’s last deficit, Y5.41 billion, recorded in March 2009.

October’s surplus followed a downwardly revised surplus of Y791.1
billion in September (preliminary +Y797.0 billion), which was up by a
revised 52.8% from a year before.

The latest data showed that Japanese exports rose 7.8% in October
from a year earlier to Y5.72 trillion, the 11th straight year-on-year
gain. But the pace of export growth decelerated further from a revised
+14.3% in September, having peaked at +45.3% in February.

In October, shipments of automobiles, power-generating machinery as
well as metalworking tools posted double-digit percentage growth from a
year earlier but the pace of y/y growth in automobiles slowed to +10.2%
from +12.0% in September.

October imports rose 8.7% on the year to Y4.90 trillion, posting
the 10th consecutive y/y rise but slowing from a revised +10.0% in
September.

The value of imports of liquefied natural gas, iron ore and coal
rose sharply from year-earlier levels despite the yen’s 7.3%
appreciation to Y83.42 to the dollar last month from Y90.00 a year
before.

Exports to the U.S. rose 4.7% from a year earlier to Y915.1
billion, posting the 10th consecutive y/y rise. The export growth pace
fell from +10.4% in September and it was well below the recent peak of
+50.5% in February 2010.

Shipments of construction machinery, power-generating machinery as
well as metalworking tools led the increase in U.S. exports.

Shipments to the EU fell 1.9% to Y655.3 billion in October, posting
the first year-on-year fall in 11 months, following a gain of 11.2% in
September.

Ships, computer parts and visual equipment led the downturn in
exports to Europe while exports of auto parts rose by 25.4% from a year
earlier.

Japan’s exports to Asia rose 11.3% to Y3.21 trillion in October,
marking the 12th consecutive month of y/y gains, but the pace slowed for
the ninth straight month from +14.3% in September and a recent peak of
68.3% in January 2010.

Higher shipments of steel, power-generating equipment and
metalworking machinery led Japanese exports to Asia.

Exports to China, the largest market for Japanese goods, expanded
17.5% to Y1.12 trillion in October, showing the 12th consecutive y/y
rise.

Chinese export growth picked up from +10.2% in September, but was
slower than +18.5% in August and +22.7% y/y in July after hitting a
recent peak of +80.0% in January 2010.

Shipments of metalworking machinery, automobiles and semiconductors
led the gain.

On a seasonally adjusted basis, Japan’s trade surplus posted a
surplus of Y578.5 billion in October, down 5.4% from the previous month
following a 3.0% m/m rise in September.

Seasonally adjusted exports were unchanged with a slight negative
bias in October from September after having posted the fifth straight
month-on-month drop until September, while imports rose 0.7%, the first
rise in five months.

Japan’s unadjusted trade balance returned to a surplus of Y90.97
billion (still -94.3% y/y) in September 2008, but in the wake of the
collapse of U.S. investment bank Lehman Brothers it plunged into
negative territory again, posting deficits from October 2008 until
January 2009 and again in March 2009.

tokyo@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4835 **

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