Current account surplus up first time since 3/11

Kyodo

The current account surplus increased in August for the first time since the March 2011 earthquake and tsunami, as the deficit in goods trade narrowed on the back of lower crude oil import prices, the government said Tuesday.

The surplus in the balance of international payments, one of the widest gauges of trade for a country, rose 4.2 percent to ¥454.7 billion, marking the first rise in 18 months, the Finance Ministry said in a preliminary report.

The balance of goods trade came to a deficit of ¥644.5 billion, shrinking by ¥45.8 billion from a year earlier. Exports dropped 5.3 percent to ¥4.844 trillion, while imports decreased 5.4 percent to ¥5.489 trillion due to a decrease of around 10 percent in crude oil prices, it said.

The current account balance remained in surplus for the seventh straight month, supported by income from robust foreign direct and portfolio investments by Japanese firms.

The surplus in the income account balance, which signals how much Japanese entities earn from overseas investment, rose 2.6 percent to ¥1.389 trillion, marking the second straight monthly increase.

The outlook remains murky, however, with exports to the European Union and China continuing to be hurt by the eurozone sovereign debt crisis that has been affecting economies outside the area through trade and financial channels.

Exports to the United States kept expanding on the robust shipment of such products as motor vehicles.

The services trade balance, covering such elements as the payment of travel and transportation costs, stood at a deficit of ¥222.5 billion.