Promises, promises, promises.
Despite Prime Minister Kiichi Miyazawa`s repeated pledge to curb his nation`s export machine and encourage consumption of foreign-made goods, Japan posted a massive jump in its politically sensitive trade surplus in May.
Japan recorded sharply higher export results in the European Community and Southeast Asia, while imports fell across the board. The monthly trade surplus nearly doubled from a year earlier, to $10.1 billion.
The Ministry of Finance also released final trade results Wednesday for 1991. Japan`s trade surplus with the U.S. grew 6.3 percent, to $40 billion, its first expansion since 1987. Japan posted a $10.5 billion surplus with Germany, a 59 percent hike from 1990, while its surplus with fast-growing Southeast Asia soared 74.3 percent, to $33.8 billion.
No area of the world records a surplus with Japan.
”Almost every forecasting organization in Japan predicts a $130 billion to $140 billion trade surplus this year, which compares to $113 billion in 1991 and $70 billion in 1989,” said economist C. Tait Ratcliffe, president of IBI, a major Tokyo consulting firm.
Ratcliffe dismissed the popular notion that foreign pressure is forcing Japanese corporations to move away from their time-honored method of exporting their way out of economic hard times such as the current ”growth recession.” ”I haven`t seen much evidence of a growing disinterest in market share,” he said. ”Japanese companies are still very much interested in expanding their share of markets around the world.”
Japan`s exports in May rose 4.6 percent, to $24.8 billion. Imports, meanwhile, decreased 19.4 percent from a year earlier, to $14.7 billion, the Finance Ministry said.
The current account surplus posted an even larger rise in May, mostly because of a sharp decline in the number of Japanese tourists going abroad. The current account surplus ballooned 128 percent, to $9.5 billion, as so-called invisible trade, payments made for services abroad, plunged from $1.2 billion to $492 million.
Finance Ministry officials said that at least part of the falloff in imports could be attributed to the two fewer weekdays in May this year.
Economists suggested other reasons. The bulk of Japan`s imports are commodities such as oil, and oil prices are down from a year ago. Also, the strengthening of the yen against the dollar has lowered commodity prices for Japan on world markets.
Moreover, the psychological effects of the bursting of the so-called bubble economy continue to take a toll on Japanese consumers` purchases of foreign luxury goods, which are the bulk of manufactured goods coming into Japan. Status-symbol products, from Gucci bags to BMWs, have taken it on the chin during the slowdown in growth.
”The key to curbing the surplus is to enliven imports by expanding domestic demand,” said Atsushi Miyawaki, a senior economist at the Japan Research Institute.
At the Munich, Germany, summit of the leaders of the Group of Seven largest industrial nations, Miyazawa has promised to introduce a stimulus package in the Diet, Japan`s parliament. However, with elections to the upper house scheduled for this month, any package won`t be passed until fall, at the earliest, and its effects won`t be felt until next year.
Meanwhile, Japan`s top central banker Wednesday rejected a monetary stimulus for the Japanese economy.
Bank of Japan Gov. Yasushi Mieno said he will not follow the U.S. lead and lower the discount rate, which fell three-quarters of a percentage point, to 3.75 percent, April 1.