JAPAN'S CURRENT ACCOUNT SURPLUS DECLINES FOR THIRD STRAIGHT YEAR

JAPAN'S CURRENT ACCOUNT SURPLUS DECLINES FOR THIRD STRAIGHT YEAR

Japan's current account surplus - at just under $53.5 billion - plunged by 30.8 percent in fiscal 1989 for the third consecutive year's decline, a Finance Ministry preliminary, seasonally unadjusted report revealed Wednesday.

However, in March the Japanese current account surplus gained 29 percent, at $8.1 billion, compared with the same month in fiscal 1988.The ministry noted that imports of manufactured products in all of fiscal 1989 accounted for 50.4 percent of total inbound shipments, exceeding the 50 percent line for the first time in Japan's history. The country's major trading partners have been pressing the Japanese government for years to step up the import of manufactured products.

One ministry official predicted that the downward trends in both the current account and merchandise trade surpluses will continue for a while longer as Japan steadily opens its domestic markets to foreign products.

However, he expressed belief that the dwindling of these surpluses might decelerate, stressing that the shrinking exchange rate of the yen against the

dollar and possible increases in the price of crude oil could easily slow the process.

The ministry authority, for example, pointed to the fact that the current account and underlying trade surpluses widened in March for the first time in 13 months.

The nation's trade surplus for March 1990 grew by 1.3 percent over the previous year at just above $8 billion. Exports for March totaled $25.5 billion, off by 1.4 percent from a year earlier, while imports dipped 2.6 percent at only $17.5 billion, the ministry said.

According to the ministry, Japan's trade surplus during the entire business year, a term which ended this March, fell by 26.4 percent against the previous 12 months, at slightly below $70.2 billion. The ministry's trade figures are based on amounts when contracts are settled.

Japan's exports were up by only 0.2 percent at a little more than $267.8 billion, while imports in fiscal 1989 climbed by 14.9 percent to an overall total of almost $197.7 billion, it was pointed out.

The balance on current account is the net value of a nation's exports of goods and services, plus or minus all unilateral monetary transfers abroad. The trade balance, on the other hand, is merely the difference in value of goods exported and that of those imported during the same period.

Ministry officials stated during a press conference that the $53 billion surplus figure for fiscal 1989 for the current account remained well within the anticipated surplus of $61 billion for the term.

They added that Japan's imports had posted a double-digit expansion for three straight years. At the same time, the growth in the nation's exports leveled off following three years of double-digit increases.

Again before seasonal adjustments, Japan's invisible trade deficit amounted to $12.7 billion in fiscal 1989, somewhat lower than the $13.5 billion deficit recorded in the previous 12 months. Invisible trade, part of the current account, consists of transactions in shipping, insurance, tourism and banking as well as other services.

It was stressed by ministry authorities that the large deficit in this category was due at least in part to continuing overseas travel by Japanese tourists. The tourism account produced a deficit of $19.6 billion during the past fiscal year, widening from a deficit of $17.5 billion registered in the previous 12 months.

Ministry statistics showed that the number of Japanese traveling abroad climbed by 13.1 percent to an overall total of 9.9 million during the fiscal term. But per-capita spending by these tourists fell to $2,312, compared with the fiscal 1988 figure of $2,324. This development was attributed to the weakened exchange value of the Japanese yen.

It was disclosed that in March, however, the nation's balance in invisible trade recorded a surplus of more than $1 billion compared with a deficit the previous year in this sector of $405 million.

Ministry officials said the exchange rate of the U.S. dollar in March averaged 148.90 yen, an appreciation of 14 percent against the yen, considering that the average exchange rate to the dollar in the same month just a year earlier had been 128 yen.

As for the transfer account, also part of the current account balance, a deficit of nearly $4 billion was recorded in March. Still, this was smaller than the deficit of $4.5 billion registered just the year before.

The unadjusted overall balance of payments, a measure of all fund flows in and out of Japan, showed a deficit of $57.3 billion in fiscal 1989. The previous year had seen a deficit of only $13.7 billion. In March, for example, the balance of payments produced a deficit of $757 million, compared with a surplus of $16 billion the previous March.