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Japan logs current account surplus for fourth straight month

Kyodo

Japan logged a current account surplus for the fourth consecutive month in May as growth in direct investment income outweighed a trade deficit triggered by a rise in fossil fuel imports, government data showed Monday.

The surplus in the balance, one of the widest gauges of international trade, stood at ¥540.7 billion, up 58.1 percent from a year earlier, the Finance Ministry said in a preliminary report. It surged 100.8 percent in April.

The income account, which reflects how much Japan earns from its foreign investments, marked a surplus of ¥1.523 trillion, up 8.6 percent on year, buoyed by higher dividends and profits from securities investments on the back of the depreciation of the yen.

Goods trade saw a deficit of ¥906.7 billion. Exports expanded 9.1 percent to ¥5.527 trillion as the yen weakened, while imports climbed 9.6 percent to ¥6.434 trillion.

A falling yen usually supports exports by making Japanese products cheaper abroad and increases the value of overseas revenue in yen terms, but it pushes up import prices.

Import costs have also been rising as demand for natural gas and oil has been growing from power companies for fossil fuel-based power generation as an alternative to nuclear power because of the Fukushima crisis.

The yen slid against the dollar by 26.8 percent from a year earlier on an average basis and the euro by 28.5 percent, the Finance Ministry said.