Japan's current account surplus rose 85.3% in May from a year earlier, with a significant increase in exports that have recovered from a slump last year amid the COVID-19 pandemic, government data showed Thursday.
The current account balance — one of the widest gauges of international trade — marked a surplus of ¥1.98 trillion ($18 billion), the Finance Ministry wrote in a preliminary report, adding that the surplus rose for the third straight month to log the 83rd consecutive month of black ink. In April, the surplus posted a more than sixfold jump.
The country's goods trade balance came to a surplus of ¥2.0 billion, a turnaround from a ¥512.5 billion deficit a year ago, as exports increased 46.5% to ¥6.18 trillion.
The value of shipments to Asian nations expanded 32.5% and those to North America soared 94.0%, boosted by strong demand for car-related products and semiconductor-producing equipment, a ministry official told reporters.
In May 2020, Japan's exports were hit hard by shrinking overseas demand for cars, auto parts and other products as many major cities abroad were placed under hard lockdowns, adding to slowing production activities within Japan amid the spread of COVID-19 infections.
Imports also rose 30.6% in May this year, to ¥6.18 trillion. Purchases of crude oil expanded nearly threefold in terms of value on higher prices. Those of pharmaceutical products increased 61.2%, possibly pushed up by surging demand for COVID-19 vaccines, the official said.
The services trade deficit shrank to ¥255.5 billion from ¥271.1 billion the previous year, thanks to a recovery in charges Japanese companies receive for their patents, other intellectual property rights and shipping export items, the official said.
The surplus in primary income, which reflects returns on overseas investments, rose 18.8% from a year earlier to ¥2.45 trillion, lifted by increases in returns on direct overseas investments and dividend payments that domestic companies received from their overseas subsidiaries.
In another economic indicator released Thursday, the Bank of Japan said bank lending rose at its slowest annual pace in more than eight years in June as corporate fund demand to weather coronavirus-linked cash constraints subsided.
Total deposits parked at commercial banks continued to rise and hit a fresh record last month, the data showed, as companies and households held off on spending.
The figures underscore the view that many companies are emerging from the pandemic's immediate hit, but holding onto cash due to uncertainty over the economic outlook.
"The balance of bank lending remains at elevated levels, but corporate fund demand seems to be subsiding," a Bank of Japan official told reporters at a briefing.
Total outstanding loans held by Japanese banks rose 1.4% in June from a year earlier to ¥578 trillion ($5.23 trillion), BOJ data showed — the slowest growth rate since January 2013.
Major banks saw lending fall 1.6% last month, posting the first year-on-year decline since November 2012, as some big borrowers paid back loans thanks to higher profits.
Total deposits held by banks stood at ¥834 trillion, hitting a fresh record.
Japan has not experienced the kind of explosive COVID-19 outbreaks seen in many other countries but has had more than 800,000 cases and 14,800 deaths.
Slow vaccine rollouts and a resurgence in infections are likely to force authorities to impose another state of emergency in Tokyo through Aug. 22, putting more pressure on a fragile economic recovery.
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