Japan has posted back-to-back monthly current account deficits for the first time since 1981, highlighting the challenges for Prime Minister Shinzo Abe’s campaign to revive the economy, the Finance Ministry said Friday.
The shortfall in the widest measure of the nation’s trade came to ¥264.1 billion in December, the ministry reported. The median estimate of 23 economists surveyed by Bloomberg News was for a deficit of ¥144.2 billion.
Weakness in global demand, the Senkakus row with China and increased energy imports because of nuclear plant shutdowns are weighing on the world’s third-biggest economy as Abe pushes the Bank of Japan to end deflation and spur growth. The yen’s slide against the dollar is at least offering the prospect of an export revival.
“It will be three to six months before we see a substantial pickup in exports,” Takahiro Sekido, a strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. and former BOJ employee, said before the ministry’s report was announced. “The current account position provides another incentive for Abe to continue his campaign.”
The yen has depreciated more than 14 percent since mid-November, when the previous government, led by the Democratic Party of Japan, announced a general election that saw Abe’s Liberal Democratic party reclaim power.
The last consecutive monthly current account deficit was logged in February 1981, according to the ministry, while the 2012 annual current surplus of ¥4.7 trillion — a 51 percent plunge from the previous year — was the lowest since the calculation method was changed in 1985.
Toyota Motor Corp. on Tuesday raised its profit forecast for the year ending March 31 to a five-year high as the depreciating yen raises the value of its vehicles sold overseas, as did Mitsubishi Heavy Industries Ltd. But Sony Corp. announced its eighth straight quarterly loss Thursday on sluggish sales.
The economy shrank in the second and third quarters of last year. The median forecast in a survey of economists by Bloomberg is for a 0.4 percent annualized expansion in the three months through December.
Exports to China last year fell 10.8 percent from 2011 to ¥26.5 trillion, as slower Chinese growth and the ongoing Senkaku Islands dispute affected the trade relationship between Asia’s two largest economies, according to Finance Ministry data.