Japan’s current account surplus in April fell by more than half from a year earlier as the global economic downturn continued to batter exports, official data showed yesterday.
The finance ministry said the April surplus dropped by 54.5 percent to ¥630.5 billion (US$6.39 billion) against a surplus of ¥1,385.9 billion a year earlier, marking the 14th consecutive monthly fall.
However, hopes for recovery remained intact, with other recent data indicating a gradual increase in production as stimulus programs by various governments kick in to ease the global economic pain, analysts said.
A country’s current account reflects the net flow of transactions, mainly its balance of trade, with other countries, but also money flows such as interest payments and returns on foreign investments.
Japan’s current account surplus was trimmed in April as exports fell 40.6 percent year-on-year to ¥3,915.1 billion, outpacing a 37.8 percent drop in imports, which came to ¥3,730.8 billion, the data showed.
The good news for the world’s second-largest economy was that exports fell at a slower pace than in the previous months. In March, exports dropped 46.5 percent, and in February the fall was 50.4 percent.
Japan’s trade performance “will likely continue to track this slight improvement in exports for the time being,” said Norio Miyagawa, an economist at Shinko Research Institute.
Expectations of an upswing in Japan have risen in recent weeks, with output in some sectors starting to pick up following months of painful production cuts and inventory adjustments.
Japan’s industrial production for April jumped 5.2 percent, the fastest monthly increase in more than five decades, boosting hopes of a recovery amid a strong rebound in local stocks.
The current account should stay in surplus in the coming months, with exports expected to pick up, while imports are likely to remain sluggish, Mizuho Research Institute analyst Atsushi Matsumoto said.
“While exports are likely to get some support from the global recovery, cheap prices of crude oil — which makes up a big part of [Japan’s] imports — could cause imports to slightly decline,” he said.
“That means Japan’s current account will likely keep posting surpluses,” he said.
Analysts are hopeful that Japan’s economy could start to grow again in the year’s second quarter after shrinking 4.0 percent quarter-on-quarter in the three months to end-March.
The Japanese economy should also benefit from a series of massive stimulus measures to counter the global crisis, including a US$147 billion supplementary budget for the current fiscal year, analysts said.
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