Business / Economy

Japan's current account surplus logs first fall in four months as oil prices rise

Kyodo

Japan’s current account surplus fell 5.9 percent from a year earlier to ¥1.65 trillion ($14.5 billion) in May, logging the first decrease in four months as higher crude oil prices pushed up imports, government data showed Monday.

The country posted a current account surplus for the 35th straight month. But goods trade registered a deficit of ¥115.1 billion — the first red ink in four months — a preliminary report from the Finance Ministry showed.

Overall imports rose 15.8 percent, to ¥5.83 trillion, as a production cut by oil-rich countries raised the price of crude oil, more than offsetting a 12.9 percent rise in exports to ¥5.71 trillion.

Exports climbed on the back of a rise in automobile shipments, after output last year fell due to a major earthquake.

With few natural resources and most of its nuclear power plants offline since the 2011 Fukushima crisis, Japan depends on imported oil, natural gas and coal for its energy needs.

“(Japan’s current account) surplus is on a slight downward trend… but that won’t last long,” said Koya Miyamae, senior economist at SMBC Nikko Securities Inc.

The surplus “will return to a moderate expansion track on the back of a weaker yen and an increase in exports,” he said.

A weaker yen supports exports by making domestic-made products more price competitive overseas.

Meanwhile, the services surplus nearly halved from a year earlier to ¥42.1 billion, as payments related to the use of intellectual property rose.

The travel surplus, a component of the service balance, came to ¥127.2 billion, a record high for the month, amid increasing visits by tourists from other parts of Asia.

The number of foreign visitors to Japan reached 2.29 million in May, up 21.2 percent from a year earlier and marking the highest figure for the month, according to the Japan Tourism Agency.

The surplus in the primary income account, which reflects how much Japan earns from foreign investments, stood at ¥1.92 trillion, up 1.6 percent from a year earlier.