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Current account surplus fell 81.3% in fiscal 2013 to hit ¥789.9 billion

Kyodo

Japan’s current account surplus in fiscal 2013 was the smallest since comparable data became available in fiscal 1985, as soaring fossil fuel imports drove up the nation’s trade deficit amid the prolonged halt of nuclear power plants, government data showed Monday.

A record goods trade deficit of ¥10.8 trillion brought the country’s annual current account surplus — one of the widest gauges of international trade — to ¥789.9 billion in the last business year, down 81.3 percent from a year earlier, the Finance Ministry said in a preliminary report.

The current account surplus shrank for the third straight year, after the devastating March 2011 earthquake and tsunami disasters hit parts of the Tohoku region and triggered an emergency at the Fukushima No. 1 nuclear power plant, the ministry said.

In fiscal 2013 through March 31 this year, exports climbed 12.2 percent to ¥69.8 trillion on the back of the yen’s depreciation, but imports surged 19.6 percent to ¥80.6 trillion. The annual goods trade balance — exports minus imports — consequently fell into the red for the third year in a row.

Imports of crude oil jumped 18.4 percent and liquefied natural gas increased 18.2 percent, while the yen slid versus the dollar by 20.8 percent and the euro by 25.7 percent on average.

A falling yen usually supports exports by making Japanese products cheaper abroad and boosts the value of overseas revenues in yen terms, but it drives up import prices. Japan depends on imports for more than 90 percent of its energy needs.

Last fiscal year, the surplus in the primary income account, which reflects how much Japan earns from its foreign investments, gained 14 percent from the previous year to a record high of ¥16.6 trillion.

It was the fifth straight year of rise in the income account, buoyed by higher dividends and profits from securities investments due largely to the weaker yen, the ministry said.

The services sector, including passenger transportation and cargo shipping, registered a deficit of ¥3.5 trillion last fiscal year. The deficit, however, became smaller when compared to fiscal 2012 as the number of overseas travelers coming to Japan increased.

In March alone, Japan posted a current account surplus of ¥116.4 billion, down 90.9 percent from a year earlier.

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