Business / Economy

Japan's current account stays in black at ¥1.85 trillion but down from April '17

Kyodo

Japan reported a current account surplus of ¥1.85 trillion ($16.86 billion) in April — marking the 46th straight month of a positive figure for the economic indicator — as a result of the country’s robust exports, government data showed Friday.

But the surplus shrank by 6.8 percent from a year ago due to a larger deficit in the service sector, including passenger and cargo transportation, according to a preliminary report released by the Finance Ministry.

The country had a trade surplus of ¥573.8 billion, up 3.8 percent, on strong exports of automobiles, ships and semiconductor-related equipment.

Exports rose 7.4 percent to ¥6.63 trillion, while imports gained 7.7 percent to ¥6.58 trillion on solid crude oil demand at home.

By contrast, the service balance marked a deficit of ¥501.5 billion, larger than the ¥280.7 billion from a year ago, due partly to the increase in internet advertising-related fees paid to overseas companies, a ministry official said.

Economists say that the country’s current account, one of the widest gauges of international trade, will likely continue to post a surplus, thanks to robust exports and Japan’s economic recovery, but rising energy imports will likely scale back its size in subsequent months.

“The increasingly uncertain trade policy of U.S. President Donald Trump remains a risk to Japan’s trade surplus,” said Takeshi Minami, chief economist at the Norinchukin Research Institute, referring to the recent launch of the U.S. Commerce Department’s national security investigation into imported cars, trucks and auto parts.

The probe could result in increased U.S. tariffs on such products, potentially dealing a blow to Japanese and other foreign automakers, while stirring fears of a global trade war.

The travel surplus expanded to ¥227.2 billion from ¥198.4 billion a year ago, the biggest for the month since 1996, when comparable data became available, reflecting the continued rise of foreign visitors to Japan.

Inbound travelers soared 12.5 percent to 2.9 million in April, the highest for that month of any year.

The surplus in the primary income account, which reflects how much Japan earns from foreign investment, increased 4.2 percent to ¥1.94 trillion in April.