TOKYO: The current account surplus expanded more than six-fold in August compared with the previous year to log a surplus for the 14th consecutive month, thanks in part to foreign visitors lifting the travel surplus to a record high, the government said in a preliminary report Thursday.
The surplus in the current account balance — one of the widest gauges of a nation’s international trade — ballooned about 6.6 times to ¥1.653 trillion ($13.8 billion) as falling crude prices pushed down the value of oil imports and a weaker yen boosted overseas income.
The goods trade deficit shrank 61.7 percent to ¥326.1 billion, with exports climbing 3.6 percent to ¥5.858 trillion while imports shed 4.9 percent to ¥6.184 trillion, the Finance Ministry said. The value of crude imports dropped 33.0 percent as average oil prices plunged 46.6 percent to $59.05 per barrel during the month. The value of liquefied natural gas fell 30.2 percent.
Japan has been relying heavily on energy imports since the March 2011 Fukushima nuclear disaster caused all its commercial reactors to be taken offline amid heightened public safety concerns. Most remain idle.
The surplus in the primary income account, which reflects how much Japan earns from foreign investments, grew 35.0 percent to ¥2.052 trillion, as the weakening of the yen helped raise receipts from overseas securities investments. It was the largest surplus for August since comparable data became available in 1985, according to the ministry.
The weakened yen also helped attract foreign visitors to Japan, lifting the travel balance to a surplus of ¥78.2 billion, the largest for August since comparable data became available in 1996.
The yen dropped versus the U.S. dollar by 19.7 percent year-on-year in the reporting month to an average of 123.23. A weaker yen usually supports exports by making Japanese products cheaper abroad and lifts the value of overseas revenues in yen terms.
A surplus in intellectual property use fees also climbed to the highest for the month, due mainly to increased royalties in the automobile and pharmaceutical sectors, helping to turn around the service balance to a surplus of ¥57.8 billion.
Satoshi Osanai, an economist at Daiwa Institute of Research, said Japan’s current account surplus was boosted by the primary income account as well as the turnaround in the service balance.
“Though the service balance has been in the red for a long time, it has started improving to post a surplus several times this year,” due partly to robust inbound demand, said Osanai. But prospects for the trade balance are unclear as a slowdown in overseas economies is likely to lead to sluggish exports, he added.
