The current account surplus expanded 23.1 percent in August from a year earlier for the third consecutive monthly increase as imports were pushed down by lower crude oil prices and a firmer yen, the government said Tuesday.
The surplus came to ¥2.00 trillion, the Finance Ministry said in a preliminary report. The nation posted a current account surplus for the 26th straight month.
The current account is one of the widest gauges of a country’s international trade.
Among central components, goods trade registered a surplus of ¥243.2 billion, a turnaround from a deficit of ¥329.2 billion a year earlier.
Exports fell 9.6 percent from a year earlier to ¥5.30 trillion, led by a decline in shipments of automobiles and steel, while imports plunged 18.3 percent to ¥5.06 trillion.
Despite the turnaround, “the trade balance has not improved much given continued weak demand in Asia,” said Yuichiro Nagai, an economist at Barclays Securities Japan Ltd.
He added, the yen’s appreciation may have also helped push down exports.
In the reporting month, the yen climbed 17.8 percent from the previous year to an average ¥101.27 per U.S. dollar, and surged 17.2 percent to ¥113.54 per euro, according to the ministry.
The value of crude oil imports plunged 35.7 percent as average oil prices dropped 23.1 percent to $45.37 per barrel in the month. The value of liquefied natural gas shed 34.6 percent.
Japan has been relying heavily on energy imports since the Fukushima nuclear crisis in 2011; most reactors remain offline today.
Meanwhile, the travel surplus shrank 27.8 percent to ¥54.3 billion, the first drop since January 2013.
A ministry official said the decline reflected an increase in Japanese people traveling overseas for summer holidays amid a firming yen as well as foreign visitors spending less despite a continued rise in the number of inbound foreign tourists.
“Despite the fall in the surplus, the travel surplus is expected to grow on a long-term basis, as the number of foreign visitors is likely to continue expanding,” Barclays’ Nagai said.
The service balance, which also includes passenger transportation and royalties, registered a deficit of ¥52.5 billion against a surplus of ¥42.1 billion a year earlier.
The surplus in the primary income account, which reflects how much Japan earns from foreign investments, dipped 2.8 percent to ¥1.99 trillion.
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.