Japan broad trade surplus at 9-year high on weaker yen

AP News
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Posted: Feb 08, 2017 4:29 AM

TOKYO (AP) — Japan's current account surplus hit a 9-year high in 2016, helped by lower costs for imported oil and a recovery in exports that could add to friction with Washington.

The data announced Wednesday came just as Prime Minister Shinzo Abe was preparing for summit meetings later in the week with President Donald Trump, who has complained Japanese don't buy enough U.S. cars and accused Japan of unfair currency policies he says are hurting U.S. manufacturers.

The current account is a wide gauge of trade and includes investment flows as well as exports and imports. Japan's 20.65 trillion yen ($183.7 billion) worldwide surplus in 2016 was up 25 percent from a year before and the second highest on record.

Exports fell by less than imports, leaving a goods trade surplus of 5.58 trillion yen ($49 billion). Japan reported a 628.8 billion yen global goods trade deficit in 2015.

U.S. figures reported Tuesday showed Japan logged the second largest trade surplus with the U.S. last year, at $68.9 billion dollars. China's, at $347 billion, was the highest. Those reports were front page news in Japan, where Trump's criticism has revived unpleasant memories of "Japan bashing" in decades past.

Japanese corporations, banks and other financial institutions are actively investing overseas, seeking higher returns than they can earn in a zero-interest rate, slow growing home market.

Oil prices fell to their lowest level in about 15 years in early 2016. That helped trim Japan's huge costs for oil imports.

The yen later gained in value against the dollar, helping to reduce overall costs for imports. The dollar has rebounded against the yen in the past few months as the Federal Reserve began raising interest rates.

One dollar now buys about 112.40 yen.

Officials say that to forestall complaints from Trump, during his Thursday-Sunday visit Abe plans to emphasize the important role of Japanese automakers and other companies in creating jobs in the U.S.

Documents compiled by Japan's trade ministry say Japanese manufacturers employ 383,000 people in all industries in the U.S. Some 1.5 million Americans have jobs related to Japanese automakers, including more than 1 million in the parts industry and 375,143 working for dealerships, according to industry figures.

Preliminary trade data released by Japan last month showed the surplus with the U.S. fell 4.6 percent in 2016 from a year before to $60.8 billion. Both exports and imports declined, though exports of Japan-made vehicles to the U.S. rose 0.6 percent to 1.75 million units. Japan imported 19,933 vehicles from the U.S. last year, down 7 percent.

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Associated Press writer Mari Yamaguchi contributed to this report.