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Trade Slowdown Worries Japanese

Current account surplus shrinks 6.8% from a year earlier, signaling that the prospect of an export- led economic recovery may be receding.

November 11, 2002|From Times Wire Services

TOKYO — The surplus on Japan's current account, the broadest measure of trade in goods and services, fell for the first time in a year in September as slowing exports threatened to remove the main prop from an economic recovery.

Data to be released today show that the current account surplus fell 6.8% in September from a year earlier to $9.76 billion, putting an end to 11 straight months of growth and falling short of forecasts.

Economists had expected a surplus of about $10.6 billion.

Gross domestic product figures for July-September, to be released Wednesday, are likely to show slight growth for the quarter, but some economists expect that to be the last growth for some time as Japan feels the chill from a global slowdown and particularly from a stuttering U.S. economy.

Most economists expect exports to make a negative contribution to GDP for the first time in a year.

Japanese manufacturers are paring estimates for profit as demand from the U.S., Japan's biggest overseas market, cools.

"The rebound in exports is already falling apart," Hitoshi Asaoka, an economist at Mitsubishi Research Institute, told Bloomberg News. "The chances are getting greater that Japan's economy may start declining toward the end of this year."

The world's No. 2 economy is emerging from its third recession in a decade. Growth probably slowed to 0.5% in the third quarter from the previous quarter.

Japan's trade surplus grew 2.0% from a year earlier to $9.9 billion, the pace of growth slowing from earlier this year in line with weaker exports.

"The fact that the current account surplus fell for the first time in a year shows that the prospect of an export-led economic recovery is receding," said Shuji Shirota, an economist at Dresdner Kleinwort Wasserstein.

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