TOKYO, JAPAN - Japan's trade surplus in May shrank by a less-than-expected 12.1 percent from a year earlier as the pace of falling exports slowed, official data showed Wednesday.

The surplus came to 299.8 billion yen (S$4.58 billion dollars), bigger than a surplus of some 214 billion yen markets had expected. It was the fourth straight month that exports exceeded imports.

The year-on-year drop in the surplus was smaller than a 85.2 percent plunge in April, according to the finance ministry data.

Exports fell 40.9 per cent in May for the eighth consecutive month of decline due mainly to lower shipments of cars and steel products. But the year-on-year fall was roughly unchanged from a 39.1 percent drop in April. Imports sank 42.4 per cent, following a 35.8 percent fall in April, on lower prices of crude oil and nonferrous metals.