Soaring costs hit Japanese economy

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TOKYO, Sept 10 (AFP) Japan was hit by more bad economic news today as rising energy costs shaved the current account surplus and wholesale prices grew at their fastest pace in nearly three decades. brThe data was released as Japan's ruling Liberal Democratic Party launched a race to pick the next prime minister, with the health of the world's second largest economy emerging as the top issue. brWith the cost of imports hitting a record high, the current account surplus fell 17.3 per cent in July from a year ago to 1.53 trillion yen (14.29 billion dollars), the finance ministry said. brAnalysts said that the figure clouded the prospect of Japan's economy, which contracted in the second quarter, expanding anytime soon. brExports are losing lustre as the global economy deteriorates including in US and Europe-and not excluding Asia, which is showing signs it is flagging, Dai-Ichi Life Research Institute senior economist Toshihiro Nagahama told Dow Jones Newswires. brThe weak trend of exports is set to continue with the world's economy expected to worsen even more. Japan's economic weakness is probably here to stay until at least the end of the current fiscal year, he said. brThe trade surplus fell 69.8 per cent to 232.2 billion yen. Japan's exports rose 8.7 per cent to 7.29 trillion yen, but imports jumped 18.9 per cent to a record high 7.06 trillion yen, the finance ministry said. brThe value of imports was inflated by the rising cost of energy in Japan, which has virtually no fossil fuel resources on its own. brCrude oil imports rose 69.2 per cent to 733.8 billion yen, coal imports more than doubled to 174.0 billion yen and liquid natural gas imports rose 59.3 per cent to 155.0 billion yen. brThe raw material prices have also triggered a spike in costs of merchandise for consumers-prompting worries about inflation in an economy that for the past decade had instead been battling against deflation.