Key is goods and services trade, MITI says

The recent rise in Japan’s current account surplus is a temporary phenomena and should not be taken as a sign of a relapse into trade friction, Shinji Sato, minister for international trade and industry, said June 16.

He made the remark during a speech in Tokyo at the Foreign Correspondents’ Club of Japan, a few days ahead of his leaving for a summit of seven industrialized nations plus Russia to be held in Denver from June 20 through 22. Apart from attending a meeting of economic ministers from seven major industrialized nations, Sato is to hold separate bilateral meetings during his stay there, including those with U.S. Trade Representative Charlene Barshefsky and Sir Leon Brittan, commissioner of the European Union.

Sato said he expects the issue of Japan’s rising current account surplus will be raised during bilateral talks, especially with the United States. However, he said that what matters in terms of direct impact on the economy and the employment situation of Japan’s trade partners is not the current account balance but the balance in trade in goods and services, a subcategory in the current account statistics.

“Japan’s surplus in trade and services account have come down to a level as low as 0.2 percent of the nation’s gross domestic product, while imported products have penetrated throughout the Japanese market,” he said. “Although we may see some temporary fluctuations, the overall trend of a changing trade structure has deeply taken root here.”