Strong exports push Japan trade balance back to surplus

Donald Trump has reportedly described Japan as his next target as he seeks to reduce the US trade deficit (AFP Photo/Kazuhiro NOGI) (AFP/File)

Tokyo (AFP) - Japan's trade balance returned to surplus in August as exports rose 18 percent year-on-year on brisk shipments of automobiles and electronic parts, the government said on Wednesday.

The world's third-largest economy logged a surplus of 113.6 billion yen ($1.0 billion), returning to the black after a deficit of 34.6 billion yen a year earlier, according to data from the finance ministry.

The figure was however much lower than market expectations of a 356.7-billion-yen surplus.

Exports rose for the ninth consecutive month on robust shipments of automobiles and electronic parts including semi-conductors.

Imports grew 15.2 percent for an eighth monthly rise, boosted mainly by higher bills for coal, liquefied natural gas and crude oil.

The ministry said the yen was on average 7.3 percent cheaper against the US dollar in August compared to the same month the year earlier, making Japan's imports costlier.

Japan's politically sensitive trade surplus with the United States soared 49.6 percent to 534.7 billion yen ($4.8 billion) on increased exports of cars and microchip-making equipment, the second consecutive monthly rise.

The nation's trade flows with the US, over which the two countries battled for decades into the 1990s, has become less of a hot-button issue under recent presidential administrations.

But President Donald Trump has vowed to root out "unfair" trade practices around the world, targeting countries including Japan.

Japan logged its first trade deficit in two months with the European Union, while its deficit with China decreased by 30.4 percent.