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Current account surplus rose 23.8% to 1.71 trillion yen in May

The nation’s current account surplus rose 23.8 percent in May from a year earlier to 1.71 trillion yen, increasing for the 11th straight month, mainly due to growing exports to China and other Asian economies, the Finance Ministry said Monday.

The balance of trade in goods and services posted a surplus of 863.7 billion yen, up 28.2 percent, the ministry said in a preliminary report.

The surplus in merchandise trade grew 37.7 percent to 1.13 trillion yen, with exports up 10 percent to 4.5 trillion yen and imports rising 3 percent to 3.36 trillion yen.

Exports to Asia rose by 17.5 percent and those to the 25-nation European Union climbed 5.7 percent. Exports to the United States, on the other hand, fell 7 percent.

Imports from the Asian economies grew 8.7 percent and those from the EU rose 5 percent.

Imports from the U.S. shrank 8.5 percent.

A ministry official said the current account surplus for May was the seventh-highest since 1985, when compilation of comparative data began.

The level of the surplus has stayed high since the beginning of the year, and maintaining such levels depends on economic developments in China and the U.S., the official said.

Private-sector economists project the current account will keep posting surpluses this fiscal year, given a recovery in the world economy propelled by robust growth of the Chinese and U.S. economies.

“With an anticipated rise in the trade surplus and the income balance on a rising trend, I expect the current account surplus to increase throughout this fiscal year,” said Mamoru Yamazaki, chief economist at Barclays Capital Japan Ltd.

Yamazaki said he expects the surplus to shrink next fiscal year on an anticipated slowdown in the overseas economy and expansion in domestic demand.

According to the Finance Ministry report, the balance of services trade posted a deficit of 270.7 billion yen in May, down 80.2 percent from a year earlier for the second straight month of decline.

The ministry official attributed the decrease to a rise in the number of Japanese traveling abroad during the Golden Week holidays in late April and early May.

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