TOKYO: Japan posted a 43.5 percent drop in the current account surplus from a year earlier in November as goods trade fell into the red on higher oil imports that cut growth in exports, government data showed.
The current account, one of the widest gauges of international trade, was at 757.2 billion yen ($7 billion), coming below the 1 trillion yen line for the first time in 10 months.
It was nevertheless the 53rd straight month of black ink, helped by primary income, which registered a surplus of 1.44 trillion yen, reflecting solid returns on overseas investments.
Among other key components, the country had a goods trade deficit of 559.1 billion yen, marking red ink for the second month in a row, according to a preliminary report released by the Finance Ministry.
Japan’s imports rose 13.5 percent to 7.48 trillion yen in the reported month due to crude oil price surges, while exports stood at 6.92 trillion yen, up 1.9 percent, lifted by soaring shipments of ships.
Although crude oil futures declined in the reporting month, “there is a time lag for the price falls in oil markets to be reflected on a customs-cleared basis,” a ministry official said.
Looking ahead, Takeshi Minami, chief economist at the Norinchukin Research Institute, said the expansion of the current account surplus will be limited due to expected deceleration in exports amid the slowdown in the global economy.
“Goods trade balance may stay in the red as imports are also expected to rise ahead of the hike in the nation’s consumption tax scheduled for October,” he said, predicting that consumers will spend more before the tax is raised from the current 8 percent to 10 percent.
Services trade marked a surplus of 12.1 billion yen, down 36.0 percent, due to a wider deficit in the transport sector.
Travel surplus, meanwhile, came to 172.3 billion yen, as inbound travelers rose 3.1 percent from a year earlier to 2.45 million in November, the highest on record for the month.