• Kyodo

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Japan’s current account surplus in October shrank 39.4% to ¥1.2 trillion ($10 billion) from a year earlier, down for the third straight month, as the trade balance continued to worsen with slow auto exports, the Finance Ministry said Wednesday.

The current account balance, one of the widest gauges of international trade, logged a 16th consecutive month of black ink, supported by solid primary income including returns on overseas investments, according to a preliminary report released by the ministry. The surplus declined 31.1% in September.

By components, exports marked a year-on-year increase of 11.7% to ¥7.1 trillion, boosted by an 80.1% jump in those of steel due to higher prices, as well as by a 45.1% rise in those of semiconductor-producing equipment amid a global chip crunch.

At the same time, however, the semiconductor shortage hit car shipments, which remained sluggish also on the back of supply disruptions of other vehicle parts produced in Southeast Asia due to the spread of COVID-19 infections.

Imports grew at a faster pace than exports in value terms, up 28.3% to ¥6.9 trillion, with purchases of crude oil and coal seeing 81.0% and 131.5% increases in value, respectively, amid a surge in energy prices, according to the ministry.

As a result, the nation’s trade balance posted a ¥166.7 billion surplus, marking the first black ink in three months but down 82.5% from the previous year’s black ink of ¥950.3 billion.

The service balance came to a deficit of ¥575.4 billion, swelling from ¥363.9 billion in the red a year earlier, as royalty payments by Japanese firms to foreign companies expanded.

Japan’s primary income balance grew 11.5% to ¥1.8 trillion, up for the seventh month in a row, as domestic firms, especially trading companies, received more dividend payments from their investment in stocks of overseas natural resource-related businesses, according to a ministry official.

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