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The nation’s current account surplus shrank 28.2 percent in January from a year earlier to 774.9 billion yen for the first contraction in two months, the Finance Ministry said Monday.

The fall stemmed from larger growth in imports than exports, with higher prices of crude oil inflating the value of imports, the ministry said. The margin of service deficits also widened.

The balance of trade in goods and services posted a deficit of 34.5 billion yen, turning around from a surplus of 311 billion yen a year before for the first year-on-year decrease in 24 months, the ministry said in a preliminary report.

The surplus in merchandise trade fell 46.3 percent to 357.6 billion yen, with exports up 3.3 percent to 4.21 trillion yen and imports up 12.9 percent to 3.85 trillion yen.

Import prices overall were pushed up due to a 24.2 percent increase in crude oil prices in dollar terms, the ministry said.

Export data tend to become volatile in January because manufacturers stop operation during the New Year’s holiday period, the length of which varies each year.

Private-sector economists expect the current account balance to keep posting surpluses. But they expect its size to shrink as import prices are likely to remain high.

Hitoshi Asaoka, an economist at Mitsubishi Research Institute, said financial markets are watching developments in exports in the coming months as earlier data showed that exports fell in January in volume terms for the first time in 19 months.

“We’re paying close attention to crude oil and other commodity prices, dollar-yen exchange rates and developments in the U.S. and Chinese economies as key factors for Japan’s current account balance,” he said.

A stronger yen tends to restrict Japanese exports by making them less competitive overseas and reducing the value of exporters’ repatriated earnings.

According to the report, the balance of services trade posted a deficit of 392.2 billion yen, up 10.7 percent from a year earlier for the first expansion in two months.

The deficit stemmed partly from a 22.1 percent rise to 1.45 million in the number of Japanese traveling abroad in January, a ministry official said. Overseas travel was adversely affected a year earlier by the severe acute respiratory syndrome epidemic.

The income account logged a surplus of 882 billion yen, up 14.1 percent from a year earlier.

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