— See Separate Table For Details Of Individual Forecasts

TOKYO (MNI) – Japan’s trade surplus for January is expected to have
totaled about Y37.1 billion, down 39.1%% from a year earlier, which
would be the first year-on-year drop in two months, following a revised
33.8% gain in December, according to the median forecast of analysts
surveyed by Market News International.

The Ministry of Finance will release the data at 0850 JST on
Wednesday, Feb. 23 (2350 GMT Tuesday).

Some of the surveyed economists said the trade balance in January
may post a deficit for the first time since the Y5.41 billion shortfall
in March 2009.

A deficit in January is not unusual — even without an external
shock such as the collapse of Lehman Brothers — as operations for
exports are often hindered by year-end and new year’s holidays in Japan.
In the month of January, the trade account was in deficit by Y968
billion in 2009, Y106 billion in 2008 and Y394 billion in 2006.

But economists are optimistic about the prospects for Japanese
exports.

Takumi Tsunoda, senior economist at Shinkin Central Bank, said,
“Exports to Asia have been picking up, and those to the U.S. have been
accelerating.”

In January this year, imports are expected to have grown 8.3% on
year, higher than an estimated rise in exports of +8.0%.

In December, exports rose a revised 12.9% y/y, above the unrevised
10.6% gain in imports.

According to the trade data for the first 20 days of January
released by the MOF earlier this month, exports rose 6.7% y/y, while
imports gained 8.2%.

In the first 20 days of January, iron and steel, metal-processing
machinery and machinery for construction and mining pushed up exports,
while crude oil, petroleum products and iron ore raised imports,
according to the MOF.

During the same period, prices of imported crude oil averaged $91.5
a barrel, up 17.8% on year, or Y47,708 per kiloliter, up 6.6%, the MOF
said.

Looking ahead, Kyohei Morita, chief economist at Barclays Capital
Japan, said, “Exports in the January-March GDP are expected to post a
2.5% q/q gain (after showing a 0.7% drop in the Q4 GDP)” partly because
excessive inventories of IT goods have been reduced in Taiwan and South
Korea, which are the main importers of IT products made in Japan.

In its monthly economic report for February, the Bank of Japan said
exports are “showing signs of resuming an uptrend.”

“Exports are expected to increase moderately, reflecting the
improvement in overseas economic conditions,” it said.

Exports after adjusted for inflation showed a robust 7.3% gain from
the previous month in December, posting the first gain in five months,
according to the BOJ.

skodama@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4838 **

[TOPICS: M$J$$$,M$A$$$,MAJDS$]