Tetsushi Kajimoto
(Reuters) – Japan’s current account surplus rose for the 15th consecutive month in May, the Finance Ministry said on Monday, as a record primary income surplus surpassed the trade deficit, reflecting a continuing shift in Japan’s revenue sources.
The current account balance rose to 2.85 trillion yen ($17.74 billion) in May, down from the median forecast of economists for a surplus of 2.45 trillion yen and a surplus of 2.5 trillion yen the previous month.
A ministry official said the weak yen has increased income from overseas securities investments, including interest payments and dividends due to rising long-term interest rates.
Looking at the trade balance by item, exports increased 12.1% from the same month last year to 8.13 trillion yen, while imports increased 9.3% from May last year, resulting in a deficit of 1.1 trillion yen, the second consecutive month of deficit.
This resulted in a current account surplus of 2.85 trillion yen.
The country’s current account surplus was once seen as a sign of export strength and a source of confidence in the safe-haven yen.
However, in recent years, the current account has sometimes fallen into deficit on a monthly basis, while the main driving force behind the current account surplus has been an increase in primary income, replacing exports.
The primary income balance, which includes interest and dividends from past overseas investments, was a surplus of 4.2 trillion yen, the largest since 1985, when comparable data became available.
For the fiscal year 2023 that ended in March this year, Japan’s current account balance (which measures trade in goods and services with the rest of the world) recorded a record surplus of 25 trillion yen.
However, some analysts predict that if the trade deficit in goods and services persists, the country’s current account surplus may start to trend downward in the medium to long term.
(1 dollar = 160.6100 yen)
(Editing by Tetsushi Kajimoto and Christopher Cushing)
