• Bloomberg


The nation’s current account rebounded into surplus in February from a record deficit the previous month as income from overseas investments outweighed deficits in trade and services.

The ¥613 billion surplus was the first in five months, the Finance Ministry reported Tuesday. The median forecast in a Bloomberg News survey of 29 economists was for an excess of ¥618.1 billion.

Officials are assessing the strength of the economy after the consumption-tax increase on April 1 that is projected to trigger a contraction this quarter. The Bank of Japan is forecast to refrain from adding to its unprecedented monetary easing at a two-day meeting ending Tuesday, waiting to see the extent of the blow to consumption.

“The increase in imports from front-loaded demand before the sales-tax hike has worn off,” Koya Miyamae, an economist at SMBC Nikko Securities Inc. in Tokyo, said before the report. “The current account will stay in surplus for the next few months as domestic consumption weakens and exports are expected to keep rising.”

The current account slid to a record deficit in January, partly due to the effect on trade of the Lunar New Year celebrated in many Asian countries. On a seasonally adjusted basis, the balance was in deficit for a second month.

The weaker yen and shuttering of nuclear power plants has pushed up energy import costs, causing a 20th straight monthly trade deficit in February. For the current account outlook, Japan needs to watch energy prices and foreign exchange moves, Finance Minister Taro Aso told reporters in Tokyo on Tuesday.

The income surplus is the portion of the current account that includes earnings from overseas trading of equities, bonds and debt securities. This tends to be higher in February and March due to the repatriation of payments before the March 31 end of the fiscal year, according to Tsutomu Saito, an economist at Daiwa Institute of Research Ltd. in Tokyo.

The excess in income is staving off the risk of deficits that could undermine confidence in Japan, the nation with the world’s largest debt burden.

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