March 25, 2003	Tuesday	Muharram 21, 1424

TOKYO, March 24: Japan’s trade surplus in February rose 20.4 per cent from a year earlier led by growth in exports of semiconductors and audio-visual components, the finance ministry said on Monday.

The surplus expanded to $7.7 billion, growing again after declining for the first time in 11 months in January.

Exports increased for the 11th straight month in February, by 7.6 per cent to 4.33 trillion yen, while imports gained for the sixth consecutive month, up 4.5 per cent at 3.39 billion yen.

Exports to all countries advanced due mainly to audio-visual related parts, which rose 63.1 per cent, said a ministry official.

He also noted strong demand, mainly in Asia, for mobile phone parts, semiconductors and other electronic components, which rose 9.0 per cent.

The value of crude oil and petrochemical imports rose 61.6 per cent and 41.8 percent respectively as prices increased ahead of the start of war in Iraq, according to the official.

Japan’s trade surplus with the rest of Asia tripled to 561.4 billion yen, with exports jumping 24.7 percent to 1.95 trillion yen and imports edging up 0.6 per cent to 1.39 trillion yen.

It was the 12th consecutive improvement in the trade balance with Asia.

Hisashi Yamada, an economist with the Japan Research Institute, said strong exports to Asia reflected the shift of Japanese production abroad and the healthy regional economy.

Asia is becoming the world’s factory, Yamada said. Japan is making the parts, and products are being put together in Asia for export to the United States. That’s why we see strong parts and semiconductor exports.

The trade surplus with the United States however fell 14.2 per cent to 567.4 billion yen as exports dropped 13.6 per cent to 1.09 trillion yen and imports fell 13.0 per cent to 519.7 billion yen.

The lower surplus was due mainly to a fall in automobile exports of 20.9 per cent, the ministry official said. Imports from the US were dragged down by a 48.4 per cent decline in office equipment.

It is hard to predict the long-term trend in exports to the US, particularly for autos, he said. Auto exports to the US fell for the first time in six months but these unexpected declines are seen sometimes.

Economist Ryo Hino with JP Morgan said the figures were in line with expectations, which were for export growth to slow in the quarter to March, with imports rising.

Export volume to the rest of Asia has regained some momentum, but a sharp drop-off in shipments to the United States is a major drag, Hino said.

Yamada noted that the war in Iraq seemed to be proceeding smoothly, and expected a pick-up in consumer demand after it ended.—AFP