Japanese Trade Surplus, Exports to U.S. Fall as Recession Fears Grow

TOKYO — Japan’s trade surplus shrank in September, data released earlier today showed, with a sharp drop in exports to the United States suggesting some fallout from the Sept. 11 attacks and raising more concerns about the state of the economy.

Overall, Japan’s customs-cleared trade surplus fell 18.3% in September from a year earlier to $8.76 billion, the Ministry of Finance reported.

The surplus with Japan’s largest trading partner, the United States, fell 9.6% from the previous year, with exports dropping 11.9%--the biggest 12-month fall in two years.

Economists said a 14.6% drop in imports from the U.S. reflected days of crippled air cargo traffic in the aftermath of the attacks and a general slowdown in economic activity at home and abroad.

Even before Sept. 11, both imports from and exports to the U.S. had been declining slightly over several months, dragged down by a slowdown in the U.S. economy and sectors related to information technology.

Bank of Japan Governor Masaru Hayami said slowing exports was a bad omen for the struggling economy.

“It is inevitable that the economic adjustment will spread further into domestic demand,” he said in an address to BOJ branch managers. “In addition, there is increasing concern that a further decline in exports will pressure the economy.”

Economists expressed concern over the second straight month of decline in Japan’s imports.

Imports fell 8.3% while exports dipped 11.1% in September.

“The point of the data is that imports are falling faster than we had expected,” said Hiromichi Shirakawa, chief economist at UBS Warburg.

The figures added to fears that the economy, which shrank 0.8% in April-June from the previous quarter, could shrink again in the current quarter, meeting the common definition of a recession.

Japan’s economic woes were also underscored today by a decline in an index commonly regarded as an equivalent of gross domestic product. The Ministry of Economy, Trade and Industry said its all-industries index fell 0.2% in August from July. The service industries sector slipped 0.1%.