Tuesday, October 8, 2013
DJ: Aug Curr Acct Surplus Y161.5bn
TOKYO--Japan's current account unexpectedly narrowed 64% from a year earlier in August, the Ministry of Finance said Tuesday, as a larger trade deficit outweighed large returns from investments abroad.
The surplus in the current account, the broadest measure of Japan's trade with the rest of the world, stood at Y161.5 billion in August before seasonal adjustment. That was narrower than the Y540 billion surplus expected by economists surveyed by The Wall Street Journal and the Nikkei.
The current account measures trade in goods, services, tourism and investment. It is calculated by determining the difference between Japan's income from foreign sources against payments on foreign obligations and excludes net capital investment.
Japan enjoyed current account surpluses with few exceptions for over three decades until a national shutdown of nuclear plants amid safety concerns after the March 2011 disasters pushed up energy imports and dragged the trade balance into the red. Since then the current account has fallen to a deficit in four separate months.
But as Japan is the world's largest creditor nation, it gains significant returns on domestic investors' sizeable overseas holdings. Economists say that income has helped keep the current account in surplus despite its recent run of trade deficits.