— See Separate Table For Details Of Individual Forecasts

TOKYO (MNI) – Japan is expected to have posted a trade deficit of
Y141.3 billion in June, a third straight month of red ink, though the
shortfall should shrink drastically from a revised deficit of Y855.8
billion in May, according to the median forecasts by economists surveyed
by Market News International.

The Ministry of Finance will release the data at 0850 JST on
Thursday, July 21 (2350 GMT Wednesday).

The last time Japan posted consecutive monthly trade deficits was
during a four-month period from October 2008 to January 2009, when
demand for Japanese cars and electronics plunged at the height of the
global credit crisis.

Exports are expected to have fallen only 4.3% on year, with the
pace of decline decelerating from -10.3% in May, as production capacity
and supply chains are recovering from the damage inflicted by the March
11 earthquake disaster.

Meanwhile, imports are expected to have risen 11.1% y/y in June,
the 18th straight y/y increase, following +12.3% in May.

In the first 20 days of June, Japanese exports fell 3.9% from a
year earlier to Y3.601 trillion, while imports rose 10.9% to Y3.717
trillion, according to MOF data released earlier. This resulted in a
trade deficit of Y115.9 billion during the period.

Automobiles, semiconductors and auto parts contributed to the drop
in exports in the first 20 days of June, while imports were pushed up by
liquefied natural gas, crude oil and coal, according to the MOF.

During the first 20 days of June, prices of imported crude oil
averaged $115.4 a barrel, up 45.0% from the whole month of June 2010 but
down from $118.6 marked in the whole of May this year, the MOF said.

Looking ahead, analysts expect the trade balance is expected to
gradually return to surplus.

“The trade balance is unlikely to show a surplus until autumn, as
production is expected to be sluggish during summer due to concerns on
stable power supplies,” said Taro Saito, senior economist at NLI
Research Institute.

** Market News International Tokyo Newsroom: 81-3-5403-4838 **

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