Japan’s current account surplus for April surged 92.7 percent from the same month last year to 1.092 trillion yen, after marking a 17 percent drop the previous month, according to preliminary figures released June 11.
Officials at the Finance Ministry acknowledged that the pace of decline has slackened. “But while there may be short-term fluctuations, given the fact that the Japanese economy is continuing to undergo structural changes, we do not believe the current account surplus will post a huge increase in the midterm,” an official at the International Finance Bureau said.
The recent trend of rising external surpluses is seen as a possible source of concern among trading partners such as the United States ahead of next week’s Denver summit of industrialized nations. Foreign exchange markets have pushed the yen higher against the dollar in recent days as dealers said they expect the U.S. and other Group of Seven nations to call on Japan to keep its surpluses in check.
U.S. Deputy Treasury Secretary Lawrence Summers, during a presummit lecture June 10 in Denver, warned of the dangers of a large increase in Japan’s trade surplus.
The surplus could “hurt global growth and fuel protectionism” in other countries, he said, adding that the U.S. has a “strong interest” in seeing Prime Minister Ryutaro Hashimoto achieve a strong domestic-demand-led recovery so that a substantial rise in the surplus can be avoided.
Japan’s surplus in trade and services combined came to 417.6 billion yen in April. There was a 32.5 billion yen deficit in the same month last year. The trade balance came to a surplus of 1.023 trillion yen, a jump of 90.9 percent compared with last April and the first rise in two months.