Japan’s six-month current account surplus quadruples

TOKYO – Agence France-Presse

AFP photo

Japan said Nov. 10 its current account surplus more than quadrupled in the six months to September thanks to an improving trade picture and buoyant returns on the country’s investments abroad.

The 8.7 trillion yen ($70.7 billion) figure for April-September - the first half of the fiscal year - was well up from the 2.0 trillion yen a year earlier, according to official data.

Japanese Prime Minister Shinzo Abe came to power nearly three years ago with a mandate to rejuvenate the world’s third-largest economy and end years of deflation-fuelled lethargy.

But his signature “Abenomics” policies centered on aggressive monetary easing, government spending and structural reforms have achieved mixed results so far.

Japan’s current account is the broadest measure of its trade with the rest of the world, including both goods and services, tourism and returns on foreign investment.

In September alone, the nation’s current account surplus surged by 50.1 percent from a year earlier to 1.5 trillion yen, the 15th consecutive year-on-year gain, the finance ministry said.

The data comes after the ministry said Japan’s trade deficit shrank more than 80 percent in September due to a slump in the value of energy imports.

“Returns on Japanese investment overseas are expected to continue growing for now, which have sustained the upward trend of its current account surplus,” said Yasunari Ueno, chief market economist at Mizuho Securities.

“Declines in energy prices will also continue contributing to its surplus, but a slowdown in the Chinese and emerging economies will remain as a negative factor,” Ueno told AFP.

Japan’s trade balance had been wallowing in the red owing to its heavy dependence on importing fossil fuels to generate electricity after it shut its stable of nuclear reactors in response to the 2011 tsunami-sparked Fukushima atomic accident.