Japan’s current account surplus widens on large investment gains


  • Trade deficits persist as fuel imports outweigh exports
  • Weak yen, Ukraine crisis, COVID-19 weigh on external demand
  • C/A surplus resilient as investment income offsets trade gap

TOKYO, May 12 (Reuters) – Japan’s current account surplus widened in March, finance ministry data showed on Thursday, easing some concerns about dwindling balance of payment as hefty gains in investment incomes more than offset surging fuel costs.

Japan’s current account surplus stood at 2.55 trillion yen ($19.68 billion) in March, the data showed, up 69 billion yen and marking the first annual gain since last July, the data showed. It compared with economists’ median forecast for a surplus of 1.75 trillion yen in a Reuters poll.

Higher oil import costs offset gains in investment income, with continuing uncertainty due to the Ukraine crisis and COVID-19 pandemic, data showed on Thursday.

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The current account data underscored the reliance of Japan’s resource-poor economy on imports of raw materials, which have been boosted by the yen weakening, pushing the trade balance into deficit.

The data also highlights the change in Japan’s economic structure as the country earns hefty returns from its past investments in securities and direct investment overseas, which have replaced trade as the main driver of its current account surplus in recent years.

For the whole of fiscal 2021, Japan ran a current account surplus of 12.6 trillion yen, down 3.6 trillion yen from the previous year, while the trade balance turned to a deficit due to rising fuel costs, it showed.

Although a weak yen also helped inflate the cost of imports, its boost to export volumes was not as great as it once was due to an ongoing shift of exporters’ production abroad.

($1 = 129.5900 yen)

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Reporting by Tetsushi Kajimoto; Editing by Sam Holmes

Our Standards: The Thomson Reuters Trust Principles.

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