The nation's surplus in merchandise trade in May jumped 66.6 percent from a year earlier to 1.22 trillion yen due to a plunge in imports caused by the prolonged economic slump, the Finance Ministry said Thursday.

But exports fell for the second consecutive month -- 1.5 percent from May 1997 -- mainly because of declining exports to economically battered parts of Asia, preliminary figures on a customs clearance basis show.

It was the 14th straight month in which the trade surplus recorded a year-on-year increase, according to the Finance Ministry.

The rate of increase is expected to slow down as Japan's economic stimulus measures, worth 16 trillion yen, take effect and boost domestic demand, a ministry official said.

Overall exports came to 4.04 trillion yen, with ship exports up 54.8 percent in value terms. Orders placed a few years ago led to the month's sales, according to the ministry. Overall imports dropped for the fifth consecutive month, plunging 16.3 percent to 2.82 trillion yen. The major factors behind the fall included a drop in lumber demand, due to fewer housing starts, and lower oil prices, the ministry said.

On a regional basis, Japan's trade surplus with the United States increased for the 20th month in a row, rising 41 percent to 455.4 billion yen. Exports to the economically buoyant U.S. grew 7.9 percent, while imports shrank 5.8 percent.

The trade surplus with Asia fell 28.3 percent, a year-on-year drop for the third consecutive month, to 406.6 billion yen.

The nation's trade surplus with the European Union soared for the 14th consecutive month. Imports of alcohol from Europe increased 49.2 percent due to the growing popularity of red wine.