TOKYO: The current account surplus expanded to ¥2.38 trillion ($21 billion) in August — the highest on record for the month — lifted by foreign investments and a bigger trade surplus, government data showed Tuesday. The surplus in the primary income account, which reflects how much Japan earns from foreign investments, rose 13.0 percent from the year before to ¥2.24 trillion, the Finance Ministry said in a preliminary report. The current account logged a surplus for the 38th straight month in August. The yen’s depreciation against the dollar was one key factor boosting income from foreign investment, a ministry official said.
“Japanese companies are stepping up overseas investment and the yen is relatively soft (against the dollar) … in that situation, primary income tends to get a boost,” said Hidenobu Tokuda, senior economist at the Mizuho Research Institute. “I think the current account surplus will continue because the income balance has had a big surplus and the trade balance is stabilizing in the black,” said Yasutoshi Nagai, chief economist at Daiwa Securities Co. “That’s not a bad thing for an export-driven economy.” The dollar averaged ¥109.91 in August, higher than ¥101.27 the previous year, while the euro traded at ¥129.84, compared with ¥113.54 the year before. Among other key components in the current account, goods trade registered a surplus of ¥318.7 billion — up 46.2 percent. Robust shipments of cars, auto parts and electronic components helped Japan’s trade surplus, which narrowed slightly from rising energy imports. Exports jumped 16.3 percent year on year to ¥6.17 trillion and imports gained 15.1 percent in the same period to ¥5.85 trillion. The country continues to rely heavily on energy imports six years on from the Fukushima nuclear disaster, amid persistent safety concerns and with many nuclear power plants still offline. “As exports are expected to be solid going forward, Japan will likely manage to register a trade surplus,” Tokuda said, though adding that the recent rapid pace of growth in semiconductor shipments to Asia may slow. The services sector, including passenger transportation and cargo shipping, had a surplus of ¥20.2 billion, a turnaround from a deficit a year ago. Strong travel demand lifted the country’s travel surplus to ¥92.7 billion, the highest for August, according to the ministry data.
