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Japan posts current account surplus for 25th straight month in July

Xinhua, September 8, 2016 Adjust font size:

Japan logged a current account surplus in July for the 25th straight month, owing to the yen's appreciation and lower costs for crude oil imports, the Finance Ministry said on Thursday.

According to the ministry's preliminary figures, the surplus expanded 0.8 percent from a year earlier, standing at 1.94 trillion yen (19.08 billion U.S. dollars) in the reporting month.

Goods trade trade posted a surplus of 613.9 billion yen from a year earlier and exports and imports retreated 15.7 percent and 26 percent respectively from a year earlier, the finance ministry's data showed.

Crude imports' value declined in the reporting period, the ministry also said, falling 42.7 percent, as global oil prices slid. Natural gas imports here were also down more than 43 percent, the government's report showed.

Japan's earnings from foreign investments decreased 23.6 percent to 1.69 trillion yen due to the yen's strength, which dragged down the surplus in the primary income account, added the ministry.

The surplus in the primary income account, which reflects how much Japan earns from foreign investments, decreased 23.6 percent to 1.69 trillion yen due partly to a firmer yen, the ministry said.

Japan's current account surplus is one of the broadest measure of its trade with the rest of the world and the data is keenly eyed by the Bank of Japan (BOJ) and the finance ministry ahead of new potential policy changes or monetary easing or tapering measures.

Many market insiders believe that due to inflation remaining flat and economic growth, despite its upward revision on Thursday, remaining largely stagnant, the central bank may plunge its interest rate further into negative territory or increase the size of its QE program following a policy meeting later this month.

In Japan the current account surplus increases the nation's net foreign assets by the corresponding amount, and a current account deficit does the reverse.

Both the Japanese government and private payments are included in the calculation and it is called the current account because goods and services are generally consumed in the current period. Enditem