Japan posted a current account surplus of ¥8.18 trillion in the January to June period, the largest since the second half of 2010, as lower crude oil prices pushed down imports and income increased on the back of a weaker yen, the government said Monday.
The surplus contrasts with a deficit of ¥497.7 billion a year earlier that largely resulted from rising imports of liquefied natural gas and crude oil after the Great East Japan Earthquake and tsunami in March 2011 prompted nuclear power plants to be shut down.
Japan has relied heavily on energy imports since the disaster crippled Tepco’s Fukushima No. 1 nuclear power plant. With heightened public concerns about safety, all of the country’s 43 commercial nuclear reactors remain offline.
A current account balance is one of widest gauges of international trade for a nation.
The balance of goods trade marked a deficit of ¥422 billion, much smaller than the ¥6.2 trillion the previous year, as exports increased 5.9 percent while imports fell 8.8 percent from the previous year, the Finance Ministry said.
In addition to the decline in crude oil imports, the ministry attributed the improvement in the trade balance to rising exports such as automobiles and electronic parts on the back of a moderate recovery in some overseas economies.
Helped by lower crude oil prices and the yen’s depreciation, Japan’s current account surplus is likely to continue expanding this year, possibly topping ¥16 trillion, said Yuichiro Nagai, an economist at Barclays Securities Japan Ltd.
But a further recovery in the trade balance, a key component in the current account, is uncertain as exports to the Asian region have been decreasing on a volume basis amid slowing demand, Nagai said.
“Prospects for the trade balance depend on how much overseas demand will recover, especially in Asia,” he said.
In the six-month period, the surplus in the primary income account — which reflects how much Japan earns from its foreign investments — surged 26.1 percent to ¥10.51 trillion, with a weaker yen helping raise receipts from overseas securities investments.
The figure was the largest for any six-month period since 1985, when comparable data became available.
The yen’s depreciation also helped attract foreign tourists to Japan, bringing the travel balance to a surplus of ¥527.3 billion, a record high since comparable data became available in 1996.
In the period, the number of foreign visitors to Japan climbed 46.0 percent to a record 9.14 million, while the number of Japanese departures abroad fell 4.9 percent to 7.62 million.
The service sector, also including passenger transportation and cargo shipping, registered a deficit of ¥872.3 billion.
The yen dropped against the U.S. dollar by 17.4 percent year-on-year in the reporting period to an average of ¥120.28.
For June alone, Japan logged a current account surplus for the 12th straight month with the balance standing at ¥558.6 billion. Goods trade registered a surplus of ¥102.6 billion.