Japan’s current account surplus dropped 14.4 percent to ¥2.01 trillion ($18.12 billion) in July from a year earlier as goods trade registered red ink for the first time in two months on oil import surges, government data showed Monday.
The country had a goods trade deficit of ¥1 billion in the current account, one of the widest gauges of international trade, according to a preliminary report by the Finance Ministry.
The current account nevertheless posted the 49th straight month of black ink for the country, helped by solid income from the nation’s foreign investments.
Amid rising prices on the global market, a jump in crude oil imports and an increase in pharmaceuticals coming from Europe, both by value, helped raise Japan’s imports to ¥6.72 trillion, against exports of ¥6.71 trillion.
Looking ahead, Takeshi Minami, chief economist at the Norinchukin Research Institute, said oil prices are unlikely to continue to rise with global supply increasing, following a decision by the Organization of the Petroleum Exporting Countries to ramp up output.
Japan saw a services trade deficit of ¥174.4 billion, the smallest since comparable data became available in 1996, due to decreases in red ink in sectors such as telecommunications.
In the services trade, travel surplus logged ¥204.2 billion — the largest figure on record for July — on the back of a robust influx of visitors from overseas. Inbound travelers rose 5.6 percent from a year earlier to 2.83 million in July.
Primary income, which includes returns on overseas investments, registered a surplus of ¥2.35 trillion, up 8.9 percent to hit a record high for the month.
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