Japan posts fourth straight current account surplus in May
July 9, 2014, 12:01 am TWN
TOKYO -- Japan recorded a current account surplus for the fourth straight month in May, government data showed Tuesday, as the country's trade shortfall narrowed.
The surplus of 522.8 billion yen (US$5.1 billion) was down 7.7 percent from the same month a year ago, but the rate of decline was much smaller than a 76.1 percent drop in April.
The latest current account figure — the broadest measure of Japan's trade picture — was influenced by a drop in the country's trade deficit as imports fell for the first time in 19 months.
The current account measures not only trade in goods but also services, tourism and returns on foreign investment.
The country's trade deficit has been expanding since 2011 as it is forced to import fossil fuels to plug an energy gap owing to its nuclear plants being closed in response to the Fukushima atomic crisis. The trade gap has been exacerbated by a sharp depreciation in the yen since late 2012.
A run of monthly deficits in late 2013 and earlier this year raised concerns about the possibility of the balance falling into the red for good, which could have ultimately seen bond yields pushed up as overseas investors demanded a premium on Japan's debt.
That would have made it tougher to finance the nation's mountain of public debt — one of the heaviest burdens in the rich world.
Japan used to boast large trade surplus on exports of cars and other industrial products.
But it has been saddled with the heavy costs of importing fossil fuels to generate electricity, after its nuclear reactors were shuttered following the 2011 tsunami-sparked atomic disaster.
The yen's sharp depreciation since late 2012 has also pushed up import costs.