Japan’s current account surplus fell for the third consecutive year in fiscal 2001.
According to preliminary figures released Wednesday by the Finance Ministry, the current account surplus fell 3.7 percent from a year earlier to 11.94 trillion yen.
The third straight fall in the surplus was prompted by a contraction in the merchandise trade surplus — exports minus imports — which logged a year-on-year decrease of 22.2 percent to 8.98 trillion yen.
As domestic manufacturers have moved production abroad, the nation’s current-account surplus has become increasingly dependent on foreign investment returns rather than export revenues.
The current account is the broadest gauge of trade measuring the difference between a country’s income from foreign sources and foreign obligations payable, excluding net capital investment. It combines trade, services, income, and current account transfers.
The trade surplus in fiscal 2001, which ended on March 31, was the lowest since the record-low 8.78 trillion yen registered in fiscal 1996, a ministry official said.
In contrast, the surplus in the income balance posted a record-high 8.68 trillion yen in fiscal 2001, showing that Japan’s income from foreign investment returns nearly equals that from merchandise trade.
Interest payments from overseas bond holdings and security investment returns proved to be the main factor inflating the income surplus in fiscal 2001, the official said.
In fiscal 2001, exports decreased 7.3 percent from the year before to 46.17 trillion yen, marking the first contraction in two years.
Imports also dropped 2.8 percent to 37.19 trillion yen, the first contraction in three years.
These resulted from the global economic slump as well as Japan’s fragile domestic demand throughout the fiscal term, the ministry said.
Reflecting the recession in the information technology sector, exports of electronics parts, such as semiconductors, fell 24.6 percent from a year earlier. Those of computers fell 15.2 percent.
The yen averaged 124.96 to the dollar during fiscal 2001, a 13.1 percent depreciation from the 110.45 logged in the previous term.
The services account deficit in fiscal 2001 shrank by 87.8 billion yen to 5.1 trillion yen, mainly because spending by Japanese tourists abroad decreased by 448.8 billion yen from a year before.
This reflects the effects of the Sept. 11 terrorist attacks in the United States, the official said.
The surplus in the trade and services account fell 38.9 percent to 3.88 trillion yen, the lowest figure since the 1.92 trillion yen posted in fiscal 1996.
The deficit in current account transfers contracted by 316.3 billion yen to 621 billion yen over the fiscal year.
As a result, the current account balance, which combines trade, services, income, and current account transfers, posted a year-on-year decline of 3.7 percent to 11.94 trillion yen in fiscal 2001.
In March alone, the current account surplus logged a year-on-year increase of 51.8 percent to 2.2 trillion yen, marking the sixth straight month of increase and the second largest figure since the 2.22 trillion yen logged in March 1993.
The increase in the current account surplus reflects recent improvements in the trade surplus and expanding income surplus, the official said.
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