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Current account deficit second-biggest

Kyodo

Japan logged its second-biggest current account deficit in November, reflecting exports slowed by the strong yen and a global economic downturn, the Finance Ministry said in a preliminary report Friday.

The deficit in the balance, one of the widest gauges of international trade, stood at ¥222.4 billion, exceeding market projections.

According to comparable data from 1985, the deficit was the second-worst after the ¥455.6 billion deficit logged in January 2012. It is also the first deficit logged for the month of November.

The ministry said the downward pressure came mainly from the deteriorating goods trade balance, which logged an ¥847.5 billion deficit, also the second-biggest, which saw exports drop 4.2 percent to ¥4.779 trillion and imports rise only 0.8 percent to ¥5.626 trillion.

The global economic slowdown linked to the sovereign debt crisis in Europe has meanwhile pressured Japan’s exports, particularly to China, its biggest trade partner, and to the 27-member European Union.

Japan’s current account balance often falls into the red in January on a temporary slowdown in manufacturing and exports caused by the New Year holidays. The November result was also affected by a combination of an expansion of the deficit in services trade and a shrinking surplus in the income account.

The surplus in the income account, reflecting how much Japan earns on its foreign investments and normally offsetting goods and services trade deficits, fell 4.9 percent to ¥891.5 billion.