The gap was 899.8 billion yen ($9.9 billion) compared with a deficit a year earlier, the Ministry of Finance said in Tokyo today. The median estimate of 26 economists surveyed by Bloomberg News was for a 783.9 billion yen surplus.

The report highlights the role overseas shipments have continued to play in propping up the world’s second-largest economy. Further export gains in coming months will prompt businesses to boost spending on plant and equipment, helping support the rebound, according to economist Akiyoshi Takumori.

“This confirms that the economy is recovering, led by solid overseas demand,” said Takumori, chief economist at Sumitomo Mitsui Asset Management Co. in Tokyo. “Although the level is still low, the recovery will fuel production and make companies more comfortable with increasing investment.”

Today’s data adds to signs of sustained expansion in the first quarter. Factory production rose at the fastest pace since May and the unemployment rate fell to a 10-month low in January. The Finance Ministry said last week capital spending also fell 18.5 percent in the three months ended Dec. 31. While that was the 11th straight decline, it was also the smallest drop in a year.

The current-account gap increased by 1.032 trillion yen from a year earlier, the second highest jump since comparable data were made available in 1986, the government said. Exports rose 40.6 percent in January from a year earlier, also the biggest advance since 1986, and imports advanced 7.1 percent.

China Shipments

Shipments to China rose at the fastest pace since 1985 in January, while exports to the U.S. advanced for the first time in more than two years, customs-cleared trade data showed last month. Today’s figures don’t include regional breakdowns.

The export rebound has been driven in part by favorable year-on-year comparisons. Shipments had plunged last year in the wake of a global credit crunch caused by the collapse of Lehman Brothers Holdings Inc. Japan posted its first current-account deficit in 13 years in January 2009 as a result.

Overseas shipments of Nissan Motor Co. cars rose 29.6 percent in January, while Mitsubishi Motor Corp. shipped more than double the amount of vehicles compared with the same month a year ago, according to the Japan Automobile Manufacturers Association.

Economy Expanded

The Cabinet Office will say the economy expanded at a revised 4 percent annualized pace last quarter, according to the median estimate of 27 economists surveyed by Bloomberg News. Preliminary figures showed 4.6 percent growth. The report is due on March 11 at 8:50 a.m. in Tokyo.

“Right now the economy is being pulled by exports and inventory adjustments,” Naoki Iizuka, a senior economist at Mizuho Securities Co. in Tokyo, said before the report was released. “Once we enter the second quarter, manufacturers’ capital spending will be a new contributor to the economy’s growth.”

A separate report today showed bank lending fell for a third consecutive month in February, sliding 1.6 percent from a year earlier, as companies cut spending.

On a seasonally adjusted basis, the current-account surplus widened to 1.71 trillion yen in January. Exports rose 8.8 percent from December, and imports climbed 2.3 percent.

The income surplus, the difference between money earned abroad and payments made to foreign investors in Japan, narrowed 8.1 percent to 911 billion yen in January from a year earlier, the ministry said.

The current account tracks the flow of goods, services and investment income between Japan and its trading partners. It includes trade not shown in the customs-cleared balance.

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As an adviser on domestic finance, Sachs helped conduct stress tests on the biggest banks and reshape the $700 billion bailout. He also helped manage trillions of dollars in additional government borrowing and advised Geithner on the market implications of issues from the Greek budget crisis to housing finance.

Sachs says he’s leaving now that markets have stabilized and Geithner has had time to set up a permanent team. “I came back down here to help the president and secretary to design and execute their response to the financial crisis,” he said in an interview. “The financial system is in a much stronger position today than it was a year ago.”

His departure comes as the crisis-response team he established becomes a permanent part of the Treasury Department. A former senior managing director at Bear Stearns Cos., the New York-based investment bank bought by JPMorgan Chase & Co. in 2008, Sachs will be one of the most senior of Geithner’s advisers to step down.

“I am likely going to head back to the private sector at some point in the next couple of months,” said Sachs, 46. He says he’ll take some time off before deciding on his next move, to recover from “running 100 miles-an-hour around the clock to stabilize the financial system” alongside regulators and White House officials.

Sperling May Follow

Another Geithner counselor, Gene Sperling, may also be leaving the Treasury soon. Sperling is under consideration for the post of deputy director of the Office of Management and Budget, according to a person familiar with the matter.

Geithner, 48, yesterday credited Sachs with showing “great judgment and skill in helping the president navigate the greatest financial crisis since the Great Depression.”

One of Sachs’ legacies will be the Office of Capital Markets and Housing Finance, successor to an informal crisis- response team he helped establish in the Treasury’s domestic finance division. Led by Matthew Kabaker, a former executive at Blackstone Group LP, the unit fulfilled one of Geithner’s goals at the start of the new administration.

“In transition, we recognized that the Treasury Department did not have a staff capability to deal with capital markets and finance-related issues,” Sachs said. “We need this team.”

Fannie, Freddie

The Treasury is moving into a long-term planning phase after 18 months of primarily managing the aftermath of the financial crisis. Priorities this year include pressing for an overhaul of financial regulation and starting to design plans for the future structures of mortgage finance companies Fannie Mae and Freddie Mac to bring to Congress in 2011.

Since taking office, the Obama administration has tried to change the $700 billion Troubled Asset Relief Program from a bank rescue into a financial-stability plan. TARP, enacted in October 2008, expires in October.

Geithner’s department last year set up the Public-Private Investment Program with the goal of removing as much as $1 trillion in troubled assets from bank balance sheets. The program has moved forward on a much smaller scale, committing as much as $30 billion in government money for participating funds.

The Treasury also held several additional rounds of capital injections for small banks. Those programs drew few applicants, as banks feared customers and investors would shun firms that accepted money from the TARP.

Clinton Years

Other regulators say Sachs’ strength has been his ability to understand the government’s role in the crisis, which allowed him to start work immediately after the 2008 presidential election. He was already known on Wall Street and in Washington from his early career, which spanned 13 years at Bear Stearns followed by a tour in the Clinton administration under former secretaries Robert Rubin and Lawrence Summers.

“When he called me in November, right away we were communicating, I knew I could trust him, I knew I was working with somebody who knew what they were talking about,” Federal Reserve Vice Chairman Donald Kohn said in an interview. “He’s really knowledgeable about financial markets and financial institutions. He’s seen that world from both sides.”

Kohn, who will step down in June after a 40-year central bank career, described Sachs as “even-tempered,” with a sense of “quiet authority creditreport.” He says they worked closely together when Sachs served in the Clinton administration and spoke daily, sometimes more often, during the height of the financial crisis.

“I have found him an important ally for the Federal Reserve,” Kohn said. “He was very sensitive to the issue of Federal Reserve independence.”

Capital Injections

One example of Sachs’ influence came when regulators were debating how big banks should repay capital injections they received in 2008 at the height of the crisis. Sachs advised regulators on how quickly banks could be expected to raise private capital, as well as how markets might react.

Sachs forged ties to his current boss during the Clinton administration, when Geithner worked in the Treasury’s international affairs division. With Sachs in domestic finance, the two worked on debt crises in Russia and Asia, while also competing on the tennis court and in triathlons.

Geithner is faster. “I think he called me from home as I was crossing the finish line,” Sachs said of one shared racing experience.

Wall Street Resume

Critics said Sachs’ financial-market experience isn’t an automatic advantage. His ties to Rubin, who hired Sachs in 1998, could be seen as a liability after the country’s biggest banks required bailouts, said William Black, a law professor at the University of Missouri-Kansas City.

“‘Market experience’ from individuals that screwed up the markets is an interesting concept,” said Black, who served as a federal bank regulator during the savings-and-loan crisis of the late 1980s and early 1990s.

The post-crisis stigma attached to Wall Street resumes accompanied Sachs to the Obama administration: Since joining the team in late 2008, he was never nominated for a Treasury position that required Senate confirmation.

Instead, Sachs was one several counselors serving Geithner in the first months of the administration, when the Treasury Department had no Senate-confirmed senior officials other than the secretary. Congress has since confirmed Deputy Secretary Neal Wolin and a number of assistant secretaries, without approving the administration’s picks to lead the Treasury’s international affairs and domestic finance divisions.

Nominations Weighed

As a result, nominees Jeffrey Goldstein and Lael Brainard have been serving alongside Sachs, Jake Siewert and Gene Sperling as counselors, while the Senate weighs their nominations. Goldstein, a former private equity executive, has been tapped as the undersecretary of domestic finance. Brainard, who served as Clinton’s deputy director of the White House National Economic Council, has been nominated as the undersecretary for international affairs.

The lack of Senate-confirmed Treasury officials came as the White House fended off criticism from lawmakers including Senator Maria Cantwell, a Democrat from Washington state who has repeatedly faulted Obama administration proposals as being too soft on the financial industry without doing enough to close regulatory loopholes.

In the Clinton administration, market experience was viewed as an asset and not a handicap. Gary Gensler, chairman of the Commodity Futures Trading Commission and Clinton-era Treasury official, said he remembers being “delighted that somebody of Lee Sachs’ caliber and values was willing to join the team.”

Mariner Investment

After Clinton left office, Sachs was a partner at New York- based Mariner Investment Group, which owned a stake in at least one company that specialized in collateralized debt obligations — a type of investment that fueled the crisis.

Before joining President Barack Obama’s transition team after the 2008 election, Sachs earned more than $3 million in salary and partnership income at Mariner in 2008, according to his financial-disclosure forms.

In the 1980s and 1990s, Sachs rose to head of global capital markets and the board of directors at Bear Stearns after graduating from Ohio’s Denison College. Sachs is married to Whitney Sachs, a former attorney, and they have two 14-year-old daughters.

“You can work for the secretary of the Treasury of the United States,” said Michael Berman, president of the Duberstein Group, a Sachs family friend who helped him link up with Rubin’s Treasury. “But when it comes right down to it, the twins are in charge.”

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Leading indicators suggest January retail sales may decline and the housing market has slipped, the department said in a report posted on its Web site. The monthly update doesn’t contained new forecasts.

Reserve Bank Governor Alan Bollard last month said he is looking for evidence that the economic recovery has become self sustaining before he will start to raise interest rates from record lows. The Treasury said forward-looking indicators such as immigration and business confidence remain upbeat, matching the view of economists who expect Bollard will raise the official cash rate in June.

“The potential for a strong acceleration in gross domestic product is suggesting the Reserve Bank should keep to its stated tightening track” of a rate increase around the middle of 2010, said Craig Ebert, senior economist at Bank of New Zealand Ltd. in Wellington.

Nine of 12 economists surveyed by Bloomberg News expect Bollard will raise the official cash rate from 2.5 percent in June. Two forecast an April increase and one tips July. None expect any change in policy at the next review on March 11.

Indicators of retail spending suggest sales volumes declined in January, the Treasury said. Consumer confidence fell in February, according to an index compiled by ANZ National Bank Ltd. and Roy Morgan Research.

House Sales

The number of house sales plunged 16 percent in January, the department said, citing its analysis of Real Estate Institute figures. The market is likely to remain steady in face of rising home-loan interest rates, it said payday loans.

Extra new listings of properties for sale could depress prices, said Ebert. Listings rose 24 percent in February from a year earlier, Web site realestate.co.nz said today.

Business confidence rose to a 10-year high last month, according to a second ANZ Bank survey published on Feb. 25. The economy could expand 4 percent this year, based on the survey’s responses, the Wellington-based bank said.

“The results were consistent with the economy continuing to expand over 2010,” the Treasury said today.

Buoying the economy, immigration is rising and New Zealand’s currency has fallen 3.8 percent against the U.S. dollar in the past three months. Exports including milk powder, cheese and meat make up 30 percent of the economy.

Commodity Prices

“The lower exchange rate in recent months is providing more confidence for exporters,” the Treasury said.

Commodity export prices have surged 7.9 percent in New Zealand dollars from January, according to an ANZ Bank index published today. Prices for six of nine commodities monitored by the bank rose in February.

Annual immigration growth was the strongest in more than five years, according to a government report today.

The number of permanent migrant arrivals exceeded departures by 22,588 in the 12 months ended Jan. 31, up from 21,253 in the 12 months through December. That’s the highest since May 2004.

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Beck will make his debut on the Albany, N.Y. news/talk station on March 1, broadcasting live from 9am-Noon. He will replace Al Roney in the WGY lineup.

“Glenn has one of the hottest shows in all of radio right now and we simply could not pass up the opportunity to add him to our on-air team,” said Chuck Custer, director of news and programming for WGY. “With Don Weeks, Glenn Beck, Rush Limbaugh and Sean Hannity, you have arguably the biggest names and best talent in the radio business make quick cash. It’s truly a world class lineup.”

Beck had been airing locally on WROW, 590 AM until Feb. 8, when that station dropped its news/talk format in favor of a nostalgia music format.

WGY did not return a phone seeking comment.

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The CARD Act, which President Barack Obama signed May 22, dramatically changes the way card issuers can profit from plastic. Instead of arbitrary rate increases, exorbitant fees and murky calculations of interest charges, card companies must now be more transparent in establishing and disclosing the terms of their offerings, and, as a result, more prudent in the way they manage credit risk.

In response to the law, most issuers already have introduced a host of new fees and rate structures to recoup some of the revenue they will lose under the new rules. The changes will make credit not only harder to get, but also more expensive.

For example, 35 percent of the card offers mailed to U.S. households in the fourth quarter of last year carried annual fees. That’s the highest percentage in 10 years, according to the marketing research firm Synovate. Those offers had an average annual interest rate of 13.5 percent, the highest in five years.

The CARD Act won’t silence all consumer gripes about credit cards, but it will save cardholders billions of dollars and usher in, for many, a welcome new era of tougher industry scrutiny from lawmakers, regulators, consumer advocates and customers.

"What this says to the card industry is, ‘Look, Congress has reset the playing field. The rules of the game have changed. Some of these practices that we know were harming consumers have to stop,’" said Nick Bourke, the manager of the Safe Credit Cards Project at the Pew Charitable Trusts. "Now the ball goes back to the industry, and they have to decide how to evolve their product."

The first phase of the law took effect last August. It required card issuers to provide 45 days’ notice on interest rate increases and that billing statements be mailed at least 21 days before their due dates.

The changes that will take effect Monday are much stronger. With the exception of cards that have variable interest rates, the new rules ban rate hikes on existing balances unless the cardholder is at least 60 days past due.

If delinquent cardholders pay on time for six straight months, the law requires that their higher penalty rates be lowered to their previous interest rates.

This will save cardholders at least $10 billion a year, according to Bourke. It’s the most important change for consumers because it bans a number of punitive rate hikes on existing balances, including the infamous "universal default," in which a late payment on one account can trigger a rate increase on another one.

It’s important to note, however, that lenders can still impose universal defaults and other penalty rate increases on new purchases. The CARD Act exempts only existing balances from such increases.

The new rules also require that card payments above the minimum monthly amounts go toward balances with the highest interest rates. Consent from cardholders also is required before fees can be assessed on transactions that exceed cards’ credit limits. The law doesn’t affect fees for late payments, however.

The new law prohibits a practice called "double-cycle billing," using the current and previous months’ balances to determine the finance charge. For people with prepaid credit cards, typically those with poor credit histories, the law also limits fees in the first year to no more than 25 percent of the starting credit limit.

Most cardholders already have seen the effects of the law in their February statements, which now are required to show how much it will cost and how long it will take to pay off balances by making only the minimum payment, as opposed to paying them off in three years.

Statements also must provide contact information for credit counseling services.

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The National Highway Traffic Safety Administration said it has ordered Toyota to provide documents showing when and how it learned of the defects affecting approximately 6 million vehicles in the United States.

Federal regulations require all automakers to notify NHTSA within five days of determining that a safety defect exists and promptly conduct a recall, the agency said.

"Safety recalls are very serious matters and automakers are required to quickly report defects," said U.S. Transportation Secretary Ray LaHood.

The move comes amid a spike in customer complaints lodged against Toyota in the NHTSA database, including some that allege fatal crashes were caused by sudden acceleration in Toyota cars since Jan. 27.

The probe will examine how Toyota learned of the defects. For example, regulators want to know if Toyota discovered the problems through consumer complaints or factory testing.

The investigation will also focus on whether the company found the problems before the vehicles in question were produced or after they had already been built.

In addition, regulators will check whether Toyota has covered all affected models in its recent recalls to make sure the automaker didn’t miss any problems.

NHTSA said it has demanded documents from Toyota on customer complaints, production data, dates of meetings and other pertinent details.

Toyota will have 30 days to provide the documents pertaining to the timeliness of the recalls and 60 days to submit information related to the adequacy of its ongoing recall efforts, according to a Department of Transportation official.

Cindy Knight, a Toyota spokeswoman, said the company is reviewing NHTSA’s request and will provide all the information they have requested.

"Toyota takes its responsibility to advance vehicle safety seriously and to alert government officials of any safety issue in a timely manner," she said.

Toyota has recalled more than 8.1 million vehicles worldwide for problems related to sudden acceleration and unresponsive brake pedals, among other things. The company has apologized for the safety lapses and pledged to repair the recalled vehicles quickly.

The recalls under investigation include two related to the entrapment of gas pedals by floor mats. Those recalls were announced last fall and expanded early this year. The third, announced in January, involved sticking gas pedals.

If the investigation determines that Toyota violated its statutory obligations, NHTSA said the manufacturer could be liable for a fine of up to $16.4 million.

That’s the maximum penalty under a 2000 law that established stiffer civil, and even criminal, penalties for automakers that fail to promptly report safety defects to federal regulators in a timely way.

The Transportation Recall Enhancement, Accountability and Documentation Act, or TRED, was passed in response to dozens of deadly Ford Explorer rollover crashes caused by faulty Firestone tires. No fines were ever levied in that case.

The biggest fine that’s ever been levied was just $1 million taken from General Motors in 2004 for failing to deal promptly with a windshield wiper issue, an amount that was negotiated down from the $3 million NHTSA originally asked for. 

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The proposed merger, which is subject to shareholder and regulatory approval, would create one of the largest U.S. electricity providers with an estimated $16 billion in annual revenue and $1.4 billion in annual net income.

Under the terms of the agreement, Allegheny shareholders would receive 0.667 of a share of FirstEnergy common stock in exchange for each share of Allegheny they own. Based on Wednesday’s closing stock prices for both companies, Allegheny shareholders would receive a value of $27.65 per share, a 31.6% premium, the companies said.

FirstEnergy will also assume roughly $3.8 billion in Allegheny net debt. The deal is expected to close in about 12 to 14 months business card.

"This combination supports our strategy of being a leading regional energy provider, focused on both regulated utility operations and our competitive generation business," said Anthony Alexander, chief executive officer of FirstEnergy, in a statement.

Akron, Ohio-based FirstEnergy (FE, Fortune 500) owns seven electric utility operating companies that serve 4.5 million customers in Ohio, Pennsylvania, New Jersey and New York.

Allegheny (AYE) is an electric utility based in Greensburg, Pa., servicing 1.6 million customers in Pennsylvania, West Virginia, Maryland and Virginia. 

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That compared with a $514,000 profit on revenues of $3.5 million in the same period in the previous fiscal year.

The Big Island biotech company (Nasdaq: CYAN), which develops and sells microalgae products, attributed the gains to the launch of new products during the quarter, including a multivitamin ay day loans.

“Despite economic challenges, our focus on business fundamentals remains robust,” President and CEO Andrew Jacobson said in a prepared statement.

Shares of Cyanotech were at $3.19 on Thursday, down 12 percent for the day.

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The $1.8 million project, which is being shepherded by Kissling Interests, will see the conversion of the former Lake Hotel at 201 Huron St. renovated into eight apartments. The project cleared one of its final hurdles Monday morning when the Erie County Industrial Development Agency's directors unanimously approved a tax-abatement package. The hotel conversion qualifies under the IDA's adaptive re-use policy and could save Kissling $80,600 in sales and mortgage-recording taxes.

"This is a great example of an adaptive re-use project," said Buffalo Common Council President David Franczyk, an ECIDA director. "It's a building with a lot of character."

Constructed in 1896, the three-story, 11,000-square-foot building has alternated as an apartment building and a hotel. As a hotel, it was known as the Darrow Hotel, the Delmar Hotel and the Lake Hotel.

Located deep in Buffalo's West Side, the project is the latest in a series of new developments to take hold in one of the poorest sections of the city. Recently, Ellicott Development Co. opened a Family Dollar store further up Niagara Street.

Kissling paid $40,000 for the building, when it acquired it one year ago.

"Personally, I'm glad to see some interest there," Franczyk said. "Give Kissling credit for taking a chance on the neighborhood."

The renovation is being designed by Carmina Wood & Morris Architects.

The first tenants are expected to move in later this year or by early 2011.

The project is one of several historic and adaptive re-use efforts underway locally by Kissling Interests. The former National Casket Co. building on Virginia Street is in the process of being renovated into 10 live-work loft-style residences. Kissling is also restoring a century-old former Remington Rand warehouse in North Tonawanda into a mixed-use building, anchored by loft-style apartments.

Besides the Kissing Interests abatement package, the IDA directors also:

• Approved an abatement package for OMFS Properties LLC to build an oral and maxillofacial surgery center on Young Street in Tonawanda that will focus on providing service to low-income families and children.

The 3,200-square-foot center, to be run by Northtowns Oral and Maxillofacial Surgery in conjunction with the University at Buffalo's School of Dental Medicine, carries a $2.3 million price tag.

The center will create 10 jobs and is expected to see 800 patients annually, with one-quarter coming from outside the region.

OMFS Properties will receive $726,250 in a tax-abatement package.

• The agency will receive a $100,000 state grant that is being allocated to Buffalo Southern Railroad for repairs to a county-owned rail line in Hamburg that services trains bringing in equipment, exhibits and animals for the annual Erie County Fair.

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The Tokyo-based economist will start publishing reports on the region on Feb. 8, Jerram said by phone today. The company hasn’t named anyone to replace him as Japan economist, he said.

“We’re not differentiating between Japan and the rest of the region,” said the 46-year-old Englishman. “The ties at the company level, the sector level and the economic level are increasingly making these distinctions artificial.”

Jerram, known for criticizing the Bank of Japan’s deflation-fighting credentials, came to the country in 1987 during the economic bubble that saw the Nikkei 225 Stock Average peak at almost four time’s today’s level. In the two decades that followed the 1990 crash, the economy fell into four recessions and grew at an average pace of 1.5 percent.

“The thing which becomes tiresome after a while is the reluctance to address problems that have fairly orthodox solutions,” the economist said. “Why would you have a policy framework that pretty much guarantees the occurrence of deflation?”

Price Declines

Even as the economy struggled to escape a cycle of declining prices that drove wages down more than 10 percent in the past decade, the Bank of Japan said price stability was anything between “about between zero and 2 percent.” That language invited the perception the bank tolerated zero growth in prices, Jerram has said.

The central bank in December revised its “understanding of stable prices,” saying stability was anything “in the positive range at or below 2 percent.” The shift came after Deputy Prime Minister Naoto Kan voiced concern the recovery was under threat from deflation.

Kan has continued his pleas for the Bank of Japan to fight price declines since he added the finance portfolio to his responsibilities in January. Bank of Japan Governor Masaaki Shirakawa this week responded by saying there’s no “magic” solution for defeating deflation.

“The government’s given them a bit of a push, but not getting much back,” Jerram said of the bank’s move. “They’re still saying a lot of stuff in terms of ‘there’s nothing more we can do.’”

London School of Economics

After a stint in England, where he got a doctorate from the London School of Economics, Jerram returned to Japan, where he worked for eight years as chief economist at ING Securities before the business was bought in 2004 by Macquarie, Australia’s biggest investment bank.

Macquarie agreed yesterday to buy the equity trading and research operations of Sal. Oppenheim Jr. & Cie. KGaA to expand its business in Europe. The Sydney-based bank is also adding to its Asia research staff, particularly in China and India, Jerram said.

“Asia has been far ahead on the global recovery cycle and its going to face some interesting challenges,” Jerram said. “Quite a lot of these countries, in contrast to previous times when they lagged behind the policy cycle in the U.S., are going to have to lead this time.”

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