Japan External Trade Organization (JETRO)
Japan's trade in services in 1997 (on a balance of payments basis) saw exports rise 2.5% to US$69.4 billion, while imports fell 5.0% to US$123.5 billion. Japan's service trade deficit contracted by 13.2% to US$54.1 billion, marking the first time in four years that the deficit shrunk (Table 13).
(1) Japan's exports on a customs basis rose slightly in U.S. dollar terms by 2.5% on the previous year to US$422.9 billion. On a yen basis, exports rose by 13.9% on the previous year to \50.94 trillion, the first time export growth has reached double figures since 1989 (Table 12). The increase in exports was a result of the recovery in the price competitiveness of exports due to the underlying weakness of the yen and growth in demand in EU and the U.S. The contribution of EU and the U.S. to the rise in total exports rose to 1.9 percentage points, and exports to these two regions accounted for almost 80% of the growth in Japan's exports. On the other hand, exports to East Asia, which had fallen 6.2% year on year in 1996, again fell in 1997 by 1.9% (Table 14). An examination of Japan's exports in 1997 by type of goods shows that exports of consumer goods, which had been in decline since 1993, experienced a recovery, recording year-on-year growth of 11.3%, and growth in exports of passenger cars was particularly strong (up 19.6% on the previous year) (Table 15).
(2) Japan's imports on a customs basis dropped for the first time since 1992, falling 2.9% year on year to US$340.4 billion in U.S. dollar terms. In yen terms, however, imports grew by 7.8% on the previous year to \40.96 trillion due to the increase in the value of imports when converted to yen, caused by the depreciation of the yen (Table 12). The slump in imports was primarily due to stagnating domestic demand. An examination of imports by type of goods shows that in addition to a substantial 8.6% year-on-year drop in imports of foodstuffs and direct consumer goods (which had been on a continuous upward trend since 1985), imports of consumer goods also declined for the first time since 1991, falling by 10.6% below the previous year (Table 17). Trade in the first half of 1998 saw exports decline 6.0% from the same period in the previous year to US$193.0 billion and imports also fall by 17.1% to US$142.9 billion. The main reason for the decline was the slump in trade with East Asia.
(3) Japan's trade in services in 1997 (on a balance of payments basis) saw exports increase by 2.5% year on year to US$69.4 billion, whereas imports dropped 5.0% to US$123.5 billion. This was the first decline since 1991, and the deficit shrank for the first time in four years to US$54.1 billion (Table 13). One factor underlying the decline in the deficit was the marked slowdown in the increase in the number of travelers to overseas destinations resulting from the recession in Japan, which led to an improvement in the travel balance. (The travel balance deficit declined from US$33.0 billion in 1996 to US$28.7 billion in 1997). As a consequence, Japan's surplus for goods and services in 1997 (on a balance of payments basis) grew substantially from US$21.3 billion in 1996 to US$47.7 billion in 1997. Japan's balance of goods and services surplus was similar to those of Italy (US$49.0 billion) and France (US$46.0 billion) in value terms, and the Japanese surplus' percentage to GDP (1.1%) was the lowest of the developed countries running a surplus (Table 18).