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Thursday, Aug. 9, 2012
Energy imports amid fear of power shortages weigh on trade in goods and services
Current account surplus at record low
Japan's current account surplus dropped to a record low ¥3.037 trillion for the six months through June, largely due to growing energy imports amid fears of electricity supply shortages, the government said Wednesday.
The balance of international payments, the widest gauge of trade for a country covering goods and services trade as well as overseas investments, fell 45.0 percent from a year earlier, the Finance Ministry said in a preliminary report. The surplus was the smallest on a first-half basis since comparable data became available in 1985.
In June alone, the balance stood at a ¥433.3 billion surplus, down 19.6 percent and the 16th straight month of deterioration, with the ministry underscoring the need to closely watch commodity prices, the world economic outlook and the yen's strength in the currency market.
For the first six months of the year, the deficit in goods trade expanded to a record high ¥2.496 trillion from ¥495.7 billion for the same period a year before.
Imports grew 9.2 percent to ¥34.045 trillion on higher energy costs as the country has been consuming more liquefied natural gas for thermal power generation to cover the loss of nuclear energy due to safety concerns following the meltdowns at the Fukushima No. 1 plant.
Exports gained 2.8 percent to ¥31.549 trillion, adding to signs of recovery from the sharp falls in the wake of the March 2011 earthquake and tsunami. However, the yen remains strong against the dollar and other major currencies, which makes Japanese products relatively expensive abroad.
The moderate increase was mainly led by robust shipments of vehicles and auto parts to the United States and other countries.
The services trade balance, covering such elements as the payment of travel and transportation costs, registered a ¥927.1 billion deficit, bloated from ¥581.1 billion.
More than offsetting the red ink, the surplus in the income balance stood at ¥7.147 trillion, down 1.8 percent. The component, which measures how much Japanese entities earn from overseas investments, has been a main source of the nation's current account surplus for years.
"A downward trend of the current account surplus has continued recently," a ministry official said. "We must keep closely watching overseas economic developments, notably the (sovereign debt) crisis in Europe, as well as currency market conditions."