— See Separate Table For Details Of Individual Forecasts

TOKYO (MNI) – Japan’s trade surplus for December is expected to
have totaled about Y450 billion, down 17.1% from a year earlier, which
would be the second straight month of year-on-year decline, following
a revised -55.9% in November, according to the median forecast of
analysts surveyed by Market News International.

The Ministry of Finance will release the data at 0850 JST on
Thursday, Jan. 27 (2350 GMT Wednesday).

In December, imports are expected to have grown 12.3% on year,
higher than an estimated rise in exports of +9.5%.

In November, exports rose 9.1% y/y, below the 14.2% gain in
imports.

According to trade data for the first 20 days of December released
by the MOF, exports rose 9.6%% y/y, while imports gained 12.6%.
Automobiles, iron and steel and ships pushed up exports, while coal,
iron ore and non-ferrous metals raised imports.

Crude oil is expected to have raised imports, pushing down the
December surplus. Prices of imported crude oil averaged $85.6 a barrel,
up 7.7% on year, or Y45,012 per kiloliter, up 1.9%, the MOF said.

Takumi Tsunoda, senior economist at Shinkin Central Bank, said,
“The pause in export growth is likely to continue due mainly to the
ongoing inventory adjustments for IT goods.”

Masao Okayama, economist at Norinchukin Research Institute, said,
“The slowdown in exports to the U.S. has been significant.”

The index of real, seasonally adjusted exports fell for a forth
straight month to 114.9 in November (against 100 in the 2005 base year)
after hitting a recent high of 123.8 in July 2010, Bank of Japan data
showed.

Real exports hit a recent bottom of 76.5 in February 2009,
following the collapse of Lehman Brothers in September 2008.

Looking ahead, Takehiro Sato, chief economist at Morgan Stanley
MUFG, said, “Japan’s exports are likely to get back on a recovery trend
gradually in the near future as the world economy has been gaining
upward momentum recently.”

Taro Saito, senior economist at NLI Research Institute, said,
“Overseas demand is expected to have made a negative contribution to the
Q4 GDP, but it should have a positive impact on the January-March GDP.”

Meanwhile, if the December surplus meets the median forecast, the
surplus for the calender year 2010 is expected to have totaled around
Y6.5 trillion, up sharply from Y2.671 trillion in 2009 and showing the
highest figure since Y10.795 trillion marked in 2007.

skodama@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4838 **

[TOPICS: M$J$$$,M$A$$$,MAJDS$]