The nation posted a current account surplus of ¥20.20 trillion in fiscal 2016, the largest in nearly a decade, as imports fell more than exports on declining crude oil prices, government data showed Thursday.
The surplus expanded for the third straight year, as it was also buoyed by a record travel surplus of ¥1.28 trillion, thanks to a jump in foreign tourists numbers during the year through March.
Goods trade registered a surplus of ¥5.77 trillion after falling crude oil prices dented the value of imports, which fell 10.9 percent from a year ago to ¥64.89 trillion, while exports dropped 3.4 percent to ¥70.65 trillion, hurt by the yen’s advance.
“The slump in crude oil prices and the yen’s advance that we saw until the U.S. presidential election (in November) had a strong bearing on the data,” said Toru Suehiro, senior market economist at Mizuho Securities Co.
The current account surplus was the third largest since fiscal 1985, when comparable data became available.
Japan relies heavily on energy imports, with most of the country’s nuclear power plants offline since the 2011 Fukushima nuclear disaster.
The value of crude oil imports slid 16.1 percent from a year ago and that of liquefied natural gas slumped 26.6 percent. Crude oil prices averaged $47.51 a barrel, down 2.5 percent.
For the previous business year, the dollar averaged ¥108.33, down from ¥120.13 in fiscal 2015. A strong yen makes Japanese exports less competitive abroad, contributing to a reduction in exports to the United States and Asia year-on-year in value terms.
The surplus in the primary income account, which reflects how much Japan earns from foreign investments, stood at ¥18.04 trillion, shrinking 13.7 percent from a year earlier as the strong yen hurt investment returns.
As the country’s current account surplus came mostly from a large surplus in primary income, the yen’s moves from now will come into focus, Mizuho’s Suehiro said.
“The basic trend that global economic recovery will lead to a weaker yen (against the dollar) and boost primary income may not change. But we need to remember that recent economic growth optimism won’t continue forever,” Suehiro added.
In March alone, the country’s current account surplus totaled ¥2.91 trillion, marking the 33rd straight month of black ink. Goods trade logged a surplus of ¥865.5 billion.
The nation’s exports have been recovering due to strong overseas demand in other parts of Asia and the United States, even as uncertainty has grown about U.S. trade policy under President Donald Trump.
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