Japan’s Current Account Surplus Rises in First Half of 2013

Japan’s current account surplus rose in the first six months of fiscal 2013, the first expansion in six half-year periods, as growth in direct investment income outweighed a trade deficit triggered by a surge in fossil fuel imports, government data showed Monday.

The surplus in the balance of international payments, one of the widest gauges of trade for a country, climbed 10.7 percent from a year earlier to 3,054.8 billion yen in the April-September period, the Finance Ministry said in a preliminary report.

The goods trade balance came to a deficit of 4,666.4 billion yen during the six months, the largest for any half-year period since comparable data became available in 1985, as a weaker yen continued to drive up import costs, it said.

Imports increased 14.5 percent to 38,510.1 billion yen in the first half of the current fiscal year, while exports rose 9.2 percent to 33,843.7 billion yen.

The income account, which reflects how much Japan earns from its foreign investments, logged a record surplus of 8,995.0 billion yen, buoyed by higher dividends and profits from securities investments on the back of the depreciation of the yen.

During the same period, the Japanese currency slid against the U.S. dollar by 24.5 percent on year on an average basis and the euro by 29.3 percent, according to the ministry.

A falling yen usually supports exports by making Japanese firms’ products cheaper abroad and increases the value of overseas revenue in yen terms, but it pushes up import prices.

Import costs have also been rising as demand for natural gas and oil has been growing from utility companies for fossil fuel-based power generation as an alternative to nuclear power following the Fukushima nuclear crisis in March 2011. Japan depends on imports for more than 90 percent of its energy needs.

via Mainichi

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