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Japan's Trade Surplus Falls, While Service Industry Grows

Japan's trade surplus has fallen by 21 percent, and the government reports that the country's service industries expanded.

The Japanese Finance Ministry says the trade surplus shrank 21 percent in September from a year earlier. It was the sixth straight month of declines, and was caused by higher oil prices. The trade surplus, the measure of all goods exported minus those imported, fell to $8.2 billion.

But the trade surplus with Asia increased four percent, rebounding from 10 straight months of declines. Japan's surplus with the United States rose almost five percent to nearly $6.2 billion in the eighth straight month of gains.

Trade Ministry data show that service industries in Japan expanded in August, led by retailers and technology consultants, indicating the nation may be headed for its longest period of economic growth in eight years.

Graham Davis, director of the Economist Corporation Network in Tokyo, says retailers are benefiting, as higher wages encourage consumers to spend more money.

"This is really the first time for a long, long time that we've seen the domestic economy kick in," said Mr. Davis. "What's tending to happen is at last people are trying, getting a little bit more money in their pockets, so consumers are able to go out and spend a little more."

The expansion in services, which accounts for 60 percent of Japan's total economic output, is expected to help the economy grow 2.4 percent in the current fiscal year, which ends next March. That will be some of the best growth reported in 15 years. Japan has endured more than a decade of economic stagnation.

Rising domestic demand also helped to raise earnings, which companies used to invest in new computer systems and consulting services.

Japanese billionaire Yoshiaki Tsutsumi has received a suspended 30-month prison sentence, after his conviction on charges of falsifying financial statements and insider trading.

The 71-year-old Mr. Tsutsumi, once considered the wealthiest man in the world, also was ordered to pay a fine of $43,000. The offenses occurred while he was chairman of the Kokudo Corporation, which controls the Seibu railway and retail conglomerate.

And news reports say Toyota is likely to become the world's biggest carmaker next year, surpassing General Motors of the United States. The reports say that Toyota and its subsidiaries are expected to make 9.2 million vehicles in the fiscal year that ends in March 2007. GM, however, is expected to produce a little more than 9.1 million cars because of a slowing market in the United States and the company's financial problems.