Trade chief Shinji Sato on Mar. 12 urged Japanese car firms to avoid possible trade friction with the United States.

In connection with that, the minister of international trade and industry urged the auto industry to keep exchange-rate profits at home, rather than cut export prices. During a meeting with representatives of the auto industry, Sato said Japan needs to build "temperate" relations with its trade partners, a ministry official said.

To achieve that, Sato was quoted as saying, Japanese auto makers may as well retain their benefits from the weaker yen at home. The trade chief made a similar remark late last month following a meeting with U.S. Secretary of State Madeleine Albright, who voiced concern over a possible reignition of bilateral auto disputes, but this is the first time Sato has directly conveyed the message to the auto industry.

Riding on a weaker yen, Japan's auto exports to the U.S. have been climbing. The latest statistics show that January exports totaled 124,845 units, marking a 75.3 percent jump from a year before.

Hiroshi Okuda, president of Toyota Motor Corp., said the ongoing resurgence in overall vehicle exports is a temporary phenomenon as Japanese automakers continue to localize production. Meanwhile, he said the exceptionally sharp rise in exports in January to the U.S. partly reflects last year's particularly weak showing.