— Adds Details From 7th Paragraph
— Japan Dec Trade Surplus +34.1% Y/Y Vs Nov -55.9%
— Japan Dec Trade Surplus MNI Median Forecast: Y450 Bln, -17.1% Y/Y
— Japan Trade Surplus Posts 1st Y/Y Rise In 2 Months
— Japan Dec Exports +13.0% Y/Y, Up 13 Months In Row
— Japan Dec Imports +10.6% Y/Y, Up 12 Months In Row
— Japan Dec Exports To US +16.5% Y/Y, Up 12 Months In Row
— Japan Dec Exports To EU +9.7% Y/Y, Up 2 Months In Row
— Japan Dec Exports To Asia +14.8% Y/Y, Up 14 Months In Row
— Japan Dec Exports To China +20.1% Y/Y, Up 14 Months In Row
— Japan 2010 Trade Surplus Y6.77 Trillion, +153.4% Y/Y, 2nd Rise In Row
— Japan 2010 Trade Surplus Highest Since Y10.795 Trillion in 2007

TOKYO (MNI) – Japan’s trade surplus surged 34.1% in December from a
year earlier to Y727.7 billion, posting the first year-on-year rise in
two months led by double-digit percentage growth in automobile and metal
working machinery exports, Ministry of Finance data released on Thursday
showed.

The figures came in much stronger than the median forecast by
economists in a Market News International survey — a drop of 17.1% y/y
to a surplus of only Y450 billion.

December’s surplus followed a downwardly revised surplus of Y161.1
billion in November (preliminary +Y162.8 billion), which was down by a
revised 55.9% from a year before. In October, the trade surplus rose
2.3%.

The pace of export growth on a year-on-year basis picked up for the
second consecutive month last month as shipments to China hit a record
high of Y1.285 trillion.

Japanese exports rose 13.0% in December from a year earlier to
Y6.11 trillion, the 13th straight year-on-year gain. The pace of export
growth accelerated from an unrevised +9.1% in November but was below
the recent peak of +45.3% marked in February 2010.

Imports gained 10.6% to Y5.39 trillion in December, posting the
12th consecutive y/y rise on purchases of iron ore and coal. The pace of
growth decelerated from an unrevised +14.2% in November.

In December, exports were led by high year-on-year growth in
shipments of automobiles (+15.2%), metalworking machinery (+77.1%) as
well as iron and steel products (+14.1%).

The value of imports of iron ore and concentrates as well as
nonferrous ore and coal rose sharply from year-earlier levels in light
of rising commodities prices and despite the yen’s 5.4% appreciation to
Y83.61 to the dollar in December from Y88.35 a year before.

Exports to the U.S. rose 16.5% from a year earlier to Y969.9
billion, posting the 12th consecutive y/y rise. The export growth pace
accelerated from +1.2% in November but it was well below the recent peak
of +50.5% in February 2010.

Shipments of automobiles, construction machinery and power
generating machines led the increase in U.S. exports.

Exports to the European Union rose 9.7% to Y703.8 billion in
December, posting the second consecutive y/y gain, following a rise of
10.1% in November.

Solid gains in shipments of automobiles, auto parts and
construction machines led exports to the EU.

Japan’s exports to Asia increased 14.8% to Y3.48 trillion in
November, marking the 14th consecutive month of y/y gains but below the
recent peak of +68.3% in January 2010.

Higher shipments of metalworking machinery, automobiles and steel
led Japanese exports to Asia.

Exports to China, the largest market for Japanese goods, expanded
20.1% to a record Y1.29 trillion in December, showing the 14th
consecutive y/y rise.

Chinese export growth picked up from +18.3% in November and +17.6%
in October, but was slower than the recent peak of +80.0% hit in January
2010.

Shipments of metalworking machinery, automobiles and power
generating machines led the gain.

On a seasonally adjusted basis, Japan’s trade surplus posted a
surplus of Y707.28 billion in December, up 31.9% from the previous month
following a 26.1% m/m fall in November.

Seasonally adjusted exports rose 5.7% in December following a 1.7%
rise in November, while imports gained 3.0% after +5.1% in November.

For the whole of 2010, Japan’s trade surplus soared 153.4% to Y6.77
trillion, up for the second straight year after rising 29.5% to Y2.67
trillion in 2009.

Exports rose 24.4% to Y67.41 trillion, the first rise in three years
led by solid growth in automobile and steel shipments, while imports
gained 17.7% to Y60.64 trillion on higher costs of oil and gas, marking
the first increase in two years.

The 2010 trade surplus was the highest since Y10.795 trillion
recorded in 2007.

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

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