Demand in Asia is driving Japanese trade

Japan's surplus on trade in goods for April rose for the tenth month in a row to 1.07 trillion yen ($9.63bn), the Finance Ministry said.

Japan's trade surplus with Asia grew 62.6% in April, whereas its surplus with the US shrank 2.4%.

Overall, the trade data is yet another sign of healthy growth in Japan.

Japan, the world's second-biggest economy, has beaten forecasts by growing 1.4% in the first quarter of 2004.

"Brisk exports"

Export growth has helped the domestic economy as the feel-good factor has spilled over into business and consumer spending.

"The brisk exports of digital and steel products to Asia contributed to the high levels of trade surplus in Asia," a Finance Ministry official said.

The stronger yen and changes in the auto industry were behind Japan's declining trade surplus with the US, with car exports dropping nearly 15% from levels seen in April last year.

"Japanese automakers are shifting production overseas," said Shuji Shirota, an economist at Dresdner Kleinwort Wasserstein.

Japanese exports to the US fell 2.4%, as did imports from the US.

Japan's trade surplus with the EU rose 1.6% to 275.2bn yen, with both exports and imports rising more than 3%.

In Asia, Japan had a trade deficit with China, though this shrank 2.6% to 203.5bn yen, and trade surpluses with South Korea, Singapore and Taiwan.