The current account surplus shrank for a second consecutive month in October as exports remained weak amid the global economic downturn,the Finance Ministry said in a preliminary report Monday.
Compared with a year ago, the current account sank 29.4 percent to ¥376.9 billion in October, the ministry said.
The surplus in the balance of international payments, one of the widest readings of a country’s trading strength, shrank despite the recovering income account surplus, which signaled Japan had earned more on its foreign investments.
The goods trade balance was ¥450.3 billion in the red, more than double the ¥208.9 billion it lost in the same month last year last year, the ministry said.
Exports slowed 6.0 percent to ¥4.95 trillion for a fifth consecutive monthly loss, largely affected by the slowing Chinese economy and the eurozone debt crisis.
Imports fell 1.4 percent to ¥5.40 trillion for the first slide in two months on declining crude oil imports, but the level of overall imports remained relatively high, the ministry said.
“We need to keep closely watching developments in overseas economies, foreign exchange and crude oil prices,” a ministry official said, referring to the nation’s diminishing current account surplus.
The balance of goods and services trade registered an ¥807.2 billion deficit, the most for an October since officials began compiling comparable data in 1985. The services balance remained in the red with a deficit of ¥356.8 billion, representing sluggishness in the transport sector on the economic downturn.
The income account, which reflects how much Japan earns on its foreign investments, more than offset deficits in other balances, marking a surplus of ¥1.24 trillion. It grew 10.9 percent for the first rise in two months, helped by higher dividend and interest payments.