The current account surplus shrank for the first time in eight months in January, weighed down by a widening trade deficit amid rising crude oil prices, government data showed Wednesday.
The surplus in one of the widest gauges of a country’s international trade stood at ¥65.5 billion ($575 million), down 88.9 percent from a year ago. Japan logged a current account surplus for the 31st month in a row.
The trade of goods registered a deficit of ¥853.4 billion, the first red ink figure in a year, as the value of imports grew more than exports, the Finance Ministry said in a preliminary report. China’s Lunar New Year holiday from late January is also believed to have weighed on shipments from Japan.
Imports increased 10.0 percent to ¥6.37 trillion while exports rose 2.9 percent to ¥5.52 trillion.
“Exports have been increasing as Asia’s economic conditions improve, but the impact of recovering crude oil prices was more highlighted in the data,” said Yuichiro Nagai, an economist at Barclays Securities Japan Ltd.
“Although seasonal factors tend to affect January data, the big picture is that the effects seen in the past of falling commodity prices helping current account surplus expand are waning,” Nagai added.
The value of crude oil imports jumped 35.7 percent in January, with average crude oil prices up 44.3 percent from a year earlier to $53.30 per barrel. Coal imports surged 52.3 percent in value.
Japan’s dependence on crude oil imports has been heavy, particularly since the 2011 Fukushima nuclear disaster, which forced most of the country’s commercial nuclear power plants to go offline.
The yen has depreciated against the dollar as financial markets hope for U.S. economic growth under the new administration. But when compared with a year earlier, the yen was still strong.
The surplus in the primary income account, which reflects how much Japan earns from foreign investments, shrank 5.4 percent to ¥1.27 trillion, partly because the yen’s firmness reduced overseas dividends when repatriated.
As the number of foreign visitors rose in the reporting month, Japan marked a continued expansion in travel surplus with the balance standing at ¥151.3 billion.
The service balance, which also includes passenger transportation and royalties, saw a deficit of ¥235.7 billion due in part to a smaller royalties surplus.
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