Despite the sharp appreciation of the Japanese yen against the dollar, the Japanese current account surplus has continued to grow, and is now expected to total $13 billion for the 1977 Japanese fiscal year.
Until now, Japanese authorities estimated the fiscal 1977 current account surplus at $11 billion. But new data for April 1977 through January 1978 shows a running total of $10 billion, and Japanese government forecasters say that about $1.5 billion will be added for each of the final two months of the fiscal year ending March 31.
The current account measures the trade surplus, less expenditures for services and other costs such as shipping. The Japanese trade surplus is now calculated at about $18 billion.
Japanese officials are unhappy with the soaring trade and current account surplus, which has resulted in enormous pressure on Japan from the U.S. and other trading partners to limit its exports, and to open its own market to imports.
Japanese officials had anticipated around the turn of the year that there might be a reduction of $4 billion or $5 billion in the current account surplus this year. They now say privately that there may be little if any reduction from the $13 billion level during 1978. But American officials still hope that some decline will occur, especially toward the end of this calendar year.
A U.S. trade official said that "we're going to get even worse figures than $13 billion before it gets better. Their surplus can't be turned around on a dime, but the Japanese government has made a fundamental commitment to take the situation seriously."
Japanese businessmen and government officials worry that a failure to show substantial progress in reducing the surplus, after recent long and freindly negotiations, might rekindle anti-Japanese reaction in the United States.
The Japanese government, which had only a $3.6 billion current account surplus in fiscal 1976, at first predicted a $700 million current account deficit for fiscal 1977. That figure was altered to a $6.5 billion surplus last September, and has moved steadily upward ever since.
A Japanese official said yesterday that the recent increment was due almost entirely to "a stagnation of imports, caused by a stagnation of the domestic economy," rather than a new burst of exports.
Meanwhile, a leading Japanese businessman, part of a 91-member trade mission making a two-week U.S. tour, said yesterday that American manufacturers facturers seeking to enter the Japanese market should stress new products and new technology.
Yotaro Iida, vice general manager for nuclear power systems of Mitsubishi Heavy Industries Ltd., said there is a good market for new ideas and new products.
In a brief address to the Valve Manufacturers Association, Ida warned there is less interest in conventional products that also can be produced in Japan. He had special reference to valves and entire nuclear plants, but others indicated his remarks had general applicability.
Iida made clear in an interview that the Japanese manufacturers to buy not opening their pocketbooks to buy everything in sight. He said that Japanese manufacturers would look for products that offer "a price, quality, or performance advantage." Iida said he had made no purchases, but was taking specifications back to Japan for further study.
Conventional American products that might gain a price advantage because of the dollar depreciation against the yen will not necessarily penetrate the Japanese market - unless they were also more efficient, he said. But Iida also said the price advantage gained through the foreign exchange situation might well help American producers competitive with Japanese firms in other markets.
As examples of new products that Japan would be interested in, he mentioned sophisticated electronic control systems, and new coal-gassification technology.
The Japanese mission, led by Yoshizo Ikeda of the Mitsui & Co. trading house, is near the end of its buying trip, a direct outgrowth of the negotiations carried on in Tokyo in January by special trade representative Robert Strauss and special trading envoy Nobuhiko Ushiba.
Ikeda and Strauss announced Monday that the mission would result in the export of $1.94 billion worth of goods to Japan, including $280 million in processed foods, $890 million in raw materials, and $770 million in industrial products.
In a telephone interview, Assistant Secretary of Commerce Frank Weil, who had a major role in planning the Japanese mission, said that at least one-fourth to one-third of the near-$2 billion total "is incremental business - we wouldn't have had it without the mission."
Of the $1.94 billion total, contracts for $340 million have been completed, and contracts for $1.6 billion are due to be complete within six months. The later figure includes $50 million in consumer goods - a low amount that was something of a disappointment to U.S. officials.
Weil, Ikeda, Iida and others agreed that an equally important result of the mission was the beginning of a dialogue with literally hundreds of American businessmen, many of whom never had considered exporting to Japan. So far, the mission has met ditional meetings are set for Pittsburgh today, and New York and Boston before the end of the trip on Friday.
Iida, for instance, said that in his own specialized field of nuclear power, he had talked to 30 American companies in the past 10 days, only about 10 of which - all major U.S. manufacturers - had any prior experience exporting to Japan.