Japan’s current account surplus shrank 8.9 percent in the first half from a year earlier to 8.752 trillion yen, marking a first decline in four half-year periods, the Finance Ministry said Thursday.
The fall was linked to an ongoing surge in oil prices, which inflated the value of imports, and to an export slowdown stemming from a period of global inventory and production adjustment in the information technology sector, the ministry said.
Yet the surplus was the third-biggest on a half-year basis, highlighting Japan’s brisk trade with the rest of the world, especially with other Asian economies, it said.
The balance of trade in goods and services posted a surplus of 3.913 trillion yen, down 27.1 percent from a year earlier, following a 1.3 percent increase in the second half of 2004, the ministry said in a preliminary report.
The surplus in merchandise trade fell 24.9 percent to 5.352 trillion yen, marking a second straight half-yearly decline.
Exports grew 4.1 percent to 29.390 trillion yen, up for the seventh consecutive six-month period. Imports climbed 13.9 percent to 24.038 trillion yen, marking a sixth straight half-yearly increase.
Imports of crude oil rose 33.8 percent and that of oil products 31.3 percent as the average oil price for the reporting period jumped 36.8 percent from a year earlier to $45.20 a barrel, the highest level on record.
Exports of steel rose 27.5 percent, while those of automobiles increased 5.8 percent.
Private-sector economists believe the current account surplus will keep shrinking in the second half of this year, with the margin of decline depending on developments in crude oil and other raw materials prices.
“We project the declining trend in the current account surplus will continue even if we expect pickups in exports in the second half of this year,” said Mamoru Yamazaki, senior economist at HSBC Securities (Japan) Ltd.
“We don’t expect sharp rises in crude oil prices from the present record high levels. But the impact of high oil prices on the current account balance would more than offset push-up factors from expected growth in exports and income account.”
According to the report, the balance of services trade posted a deficit of 1.440 trillion yen in the January-June period of 2005, down 18 percent from a year earlier for a second straight half-year of shrinkage.
The deficit was partly attributable to a 10 percent rise in the number of Japanese traveling abroad in the first half of 2005, which stood at 8.35 million, a ministry official said.
The income account, covering income from Japanese investments in foreign securities and payments by foreign employers in Japan, logged a surplus of 5.437 trillion yen, up 16.8 percent from a year earlier and the highest figure on record.
In the single month of June, Japan’s current account surplus came to 1.087 trillion yen, down 15.3 percent from a year earlier for the second straight month of decline, according to the Finance Ministry report.
The balance of trade in goods and services in the month registered a surplus of 757.4 billion yen, down 22.6 percent.
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