• Kyodo News

  • SHARE

Japan’s current account surplus in fiscal 2006 through March 31 grew 11.1 percent from the previous year to a record 21.253 trillion yen for the fifth consecutive yearly expansion on firm exports, the Finance Ministry said Monday.

The surplus, the largest since fiscal 1985 when comparable data became available, was boosted by strong exports and returns on overseas investments, and marks the first time the current account surplus has topped 20 trillion yen, a ministry official said.

The balance of trade in goods and services posted a surplus of 8.296 trillion yen, up 12.0 percent, the ministry said in a preliminary report.

The surplus in merchandise trade expanded 9.9 percent to 10.515 trillion yen, with exports rising 13.0 percent to 73.63 trillion yen, up for the fifth consecutive year, and imports increasing 13.5 percent to 63.12 trillion yen, also up for the fifth straight year.

Auto exports grew 22.2 percent and steel exports rose 16.6 percent.

Crude oil imports climbed 14.2 percent and imports of nonferrous metals soared 47.9 percent, the ministry said.

Crude oil prices averaged $63.45 per barrel in fiscal 2006, an increase of 13.7 percent from the previous year and up for the fifth year in a row.

“The nation’s current account surplus grew to a record-high figure, lifted by a record monthly current account surplus in March stemming from firm exports and a decline in imports affected by the Lunar New Year holidays” in China and other Asian countries, a Finance Ministry official said.

The income account — net income from Japanese investments overseas — logged a record surplus of 14.24 trillion yen, up for the fourth year in a row on the back of a rise in interest income and stock dividends from investments overseas.

The size of the income account surplus surpassed that of merchandise trade for the second straight year, suggesting that the economy depends more on returns from overseas investments than on earnings from exports.

Private-sector economists expect this structural change to continue.

“Although exports have remained strong recently, bolstered by the weakness of the yen and firm demand in overseas markets, the Japanese economy is likely to depend more on returns from overseas investments,” said Takuji Aida, chief economist at Barclays Capital Japan Ltd.

Growth in the surplus in merchandise trade is expected to slow as domestic demand becomes strong, while there are ample opportunities for overseas investment, given buoyant markets in emerging economies, Aida said.

The balance of trade in services posted a deficit of 2.219 trillion yen in fiscal 2006, up 2.9 percent.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.

SUBSCRIBE NOW