41% surplus fall laid to weak exports

Kyodo

The nation’s current account surplus fell 40.6 percent in July from a year earlier to ¥625.4 billion, signaling weak exports to Europe and China while energy imports continued to rise, the government said Monday.

But the balance of international payments, one of the widest gauges of trade for a country, continued showing strength on the robustness of foreign direct and portfolio investments by Japanese firms.

The balance deteriorated for the 17th straight month, the Finance Ministry said in a preliminary report. Looking ahead, it warned about the gloomier global economic outlook, continued strength of the yen and movements in crude oil prices.

Among key components, the balance of goods trade was ¥373.6 billion in deficit.

Exports slid 7.4 percent to ¥5.118 trillion for the second straight monthly fall on the weakness of shipments in semiconductors and other electronic devices, while imports grew 1.9 percent to ¥5.492 trillion, the first gain in two months, amid rises in such products as liquefied natural gas and smartphones.

Exports to the United States continued to expand on the robust shipment of items such as vehicles, while those to the European Union and China kept falling due to the sovereign debt crisis in the eurozone, from which a negative impact has been felt even outside the area, especially in emerging economies, through trade and financial channels.

The goods trade balance fell into the red for the first time in two months as utilities have increasingly consumed imported LNG, the price of which has been rising, to boost thermal power generation and cover the loss of nearly all nuclear power.