from Follow the Money

Why would a rise in Japan’s trade surplus be “unexpected”?

October 25, 2006

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Call me old fashioned, but isn't a rising trade surplus -- driven by strong exports -- a rather natural result of a weak currency?    The yen is super-weak v the euro and weak v. the dollar.   And it has been rather clear than Japanese car companies are gaining market share here in the US ....

Strong September export growth from both Japan and China suggests that the US continued to snap up a lot of imports in September.  And continued strong export growth, rising interest income on Japanese and Chinese holdings of US debt and -- eventually -- a somewhat lower oil import bill -- all suggest a rise in East Asia's current account surplus.

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