Japanese Surplus Falls

The Japanese trade surplus has fallen over the course of July, seeing the first decline in the surplus in almost a year, according to official figures released today

The difference between imports and exports in the Japanese economy has grown or remained consistent over the last nine months before today’s decline.

The surplus has decreased by 21.1% from the same time last year to approximately $5.8 billion, according to the figures released today by the Japanese Ministry of Finance.

And after last month’s growth in surplus off the back of strong auto exports, analysts have attributed the falling surplus to the rising cost of fuel imports from abroad.

The biggest Japanese surplus, that with the US, has fallen significantly over the last month, down 4.7% after last month’s 6.7% growth, reflecting a decrease in trade with the states as the dollar continues to weaken.

The Bank of Japan, which meets this Thursday to decide interest rate policy for the coming month, is expected to act according to today’s news, and many analysts suggest that interest rates could rise yet again to 0.75% before the month is out.

With the Japanese economy growing at a fast rate, and inflation beginning to get a grip on consumer prices, the Bank has already made moves this year to curb any further price rises.

Analysts now widely anticipate a further rise could come over the course of the next few days, off the back of today’s news.

The predictions come as a dampener for investor confidence, suggesting that business could be further hit by increased bank lending rates.

However, with the level of resilience shown in the Japanese economy over the last few years, few doubt its ability to remain strong and fight off the rising threat of inflation before it becomes detrimental to economic performance.

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