— Adds Details, Official and Economist Comments Throughout
— Japan July Trade Surplus Y72.5 Bln, -90.8% Y/Y
— Japan July Trade Surplus MNI Poll Median Forecast: Y50.0 Bln
— Japan July Exports -3.3% Y/Y, 5th Drop In Row
— Japan July Imports +9.9% Y/Y, 19th Rise In Row
— Japan Exports To Asia -2.7% Y/Y, 5th Drop In Row
— Japan Exports to China -1.0% Y/Y, 1st Drop In 2 Months
— Japan Exports To US -8.2% Y/Y, 5th Drop In Row
— Japan Exports To EU +6.0% Y/Y, 2nd Rise In Row
— Japan July Export Fall Led by Ships, Semiconductors, Cars

TOKYO (MNI) – Japan posted a trade surplus for the second straight
month in July as a continued recovery in quake-hit supply chains led to
smaller drops in auto and chips exports, data from the Ministry of
Finance showed Thursday.

The July surplus came to Y72.48 billion, up from Y68.65 billion in
June. But it was still down 90.8% from a surplus of Y784.61 billion a
year earlier.

The July figure came in higher than the median forecast by
economists in a Market News International survey for a surplus of Y50.0
billion.

Japanese exports fell 3.3% to Y5.78 trillion in July, marking the
fifth straight year-on-year drop on lower shipments of ships,
semiconductors and automobiles, with the pace of decline accelerating
from a 1.6% drop in June.

This was largely due to a 31.0% y/y plunge in ship exports in July,
compared with a 8.1% drop in June, while the pace of mineral fuel
shipments slowed to +36.7% in July from +86.4% in June, a MOF official
told reporters.

It is unknown how the recent rapid rise in the yen, which makes
Japanese exports more expensive, might have affected the July trade
balance, he said.

In July, exports of automobiles, which were the hardest hit by the
March 11 earthquake disaster, fell only 3.8% from a year earlier, with
the pace of decline decelerating further from -12.5% in June, -38.9% in
May and -67.0% in April.

July shipments of semiconductors fell 15.0%, improving from -17.1%
in June.

Exports of mineral fuels to Asia as well as metalworking machinery
shipments to Europe and Asia continued to show year-on-year gains.

“Exports have rebounded after the supply-side constraints have
eased. But today’s data showed that the recovery is slowing,” said Taro
Saito, senior economist at NLI Research Institute.

“Looking ahead, the pace of production recovery is likely to
decelerate due to electricity supply constraints. Also, Japan’s exports
are expected to slow in the fall (October-November) onward in the face
of the strong yen and the slowing global economy.”

Imports rose 9.9% y/y in July to Y5.71 trillion, posting the 19th
consecutive rise after rising 9.8% in June, led by continued
year-on-year gains in the prices of crude oil and liquefied natural gas.

MOF data showed that imported crude oil prices averaged $113.5, up
48.6% on the year in July, compared with $114.7, or up 44.0% in June.

Exports to Asia, the largest market for Japanese goods, fell 2.7%
to Y3.25 trillion, the fifth straight y/y drop, following a 1.7% fall in
June.

The decline was led by year-on-year falls in semiconductor and
plastic shipments.

Export to China dipped 1.0% to Y1.15 trillion in July for the
second straight y/y drop, following a 1.2% rise in the previous month.

Exports to the U.S. fell 8.2% to Y892.5 billion in July, a fifth
consecutive month of declines, following a 6.1% drop in the previous
month. Auto and autoparts exports remained depressed.

Meantime, exports to the European Union rose 6.0% to Y670.7 billion
in July, the second straight y/y rise led by higher shipments of
electrical measuring apparatus and metalworking machinery, after a 8.0%
rise in June.

tokyo@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4835 **

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