Japan’s 1st-half current account surplus hits record low

Japan logged a record low first-half current account surplus of 2,721.4 billion yen in the first six months of fiscal 2012 on shrinking exports amid a global economic slowdown and increasing fuel imports, the government said Thursday. The surplus in the balance of international payments, one of the widest gauges of trade for a country, dropped 41.3% from a year earlier and was the smallest for the April-September period since comparable data became available in 1985, the Finance Ministry said in a preliminary report, according to (Kyodo) news agency. For the six-month period, the goods trade deficit expanded 1,389.5 billion yen to 2,619.1 billion yen, the most for any half-year period, it said. Of the total, the value of exports slid 0.9% to 30.98 trillion yen, due mainly to slowing exports on the back of the eurozone sovereign debt crisis and the Chinese economic slowdown. Exports to China fell 8.2% from a year earlier and those to Europe declined 16.2%. Imports expanded 3.4% to 33.60 trillion yen on higher crude oil and natural gas imports. Japanese utilities have boosted consumption of liquefied natural gas to reboot thermal power generation as an alternative to atomic power, the use of which has stalled in the wake of the Fukushima nuclear crisis. A ministry official suggested the current account balance will continue to be affected by a murky global economic condition and a strong yen, as well as crude oil price increases. The balance of services trade, covering such elements as travel payments and transport costs, came to a deficit of 1,679.1 billion yen, up from a deficit of 1,018.7 billion yen. The deficit expanded for the third straight first-half period on increased shipment costs, although the number of overseas visitors to Japan increased in a turnaround from a decline a year earlier following the March 2011 earthquake and tsunami disaster. The income account, which reflects how much Japan earns on its foreign direct and portfolio investments, expanded 2.1% to 7,502.4 billion yen, due mainly to an increase in reinvested earnings. In September alone, the surplus was down 68.75 to 503.6 billion yen on slowing exports of such products as vehicles, as well as expansion in the service trade deficit, it said. But the figure remained in the black for the eighth consecutive month.