TRADE SURPLUS MORE THAN TRIPLES IN JAPAN

TRADE SURPLUS MORE THAN TRIPLES IN JAPAN

Japan's politically contentious trade surplus more than tripled in January from the same month last year, data released on Wednesday showed. The news refocused attention on the nation's slumping domestic economy.

The current account surplus, the broadest measure of trade in goods and services, soared 212.8 percent to 476.2 billion yen ($3.7 billion), while the merchandise trade surplus climbed 136.6 percent to 538.8 billion yen, the Ministry of Finance said.The surge underlined the fact that Japan's weak domestic economy is not sucking in imports, said economist Kenji Arata at MCM Asia Pacific.

''Exports to Asia are certainly falling due to the crisis, but so are imports. Trade with the region in general is on the decline,'' Mr. Arata said. ''Although exports to Asia have fallen, this is being offset by exports to the EU and the United States.'' Finance Minister Hikaru Matsunaga acknowledged in Parliament that the economy remains stagnant and ''is in a very severe situation.''

Lehman Brothers Japan chief economist Russell Jones said the figures suggest that ''the contribution from net exports to growth in the first quarter is likely to be weak - certainly much weaker than in the fourth quarter, when it was a strong positive, about the only strong positive, for growth.''

But the January surplus was somewhat less than expected, and financial markets showed little immediate reaction.

The surplus was, in fact, below the average forecast of 572.9 billion yen by economists surveyed this week by Reuters. Their forecasts ranged from 485 billion yen to 673 billion yen.

A Ministry of Finance official repeated the government's contention that despite recent rises, the surplus in goods and services - the current account minus the income component - will not rise drastically in the medium to long term.