By SATOSHI KIMURA/ Staff Writer
May 12, 2023 at 14:42 JST
The Finance Ministry (Asahi Shimbun file photo)
Japan’s current account surplus in fiscal 2022 shrank 54 percent from the previous year as the trade deficit hit a record high due to the weaker yen and a spike in energy prices.
The current account, which measures the inflow and outflow of goods, services, investment income and transfer payments, posted a surplus of 9.23 trillion yen ($68.59 billion) in the year through March, according to the Finance Ministry’s preliminary balance of payments statistics released on May 11.
The surplus fell by 10.93 trillion yen from fiscal 2021, the second-largest margin on record.
It was the first time for the surplus to drop below the 10-trillion-yen mark in eight years.
The trade balance, a main component of the current account, logged a record deficit of 18.06 trillion yen as the value of imports surged due to the yen’s sharp depreciation, coupled with increased costs of oil, gas and other resources.
The Japanese currency traded at more than 150 yen against the dollar at one point during the reporting year.
The value of imported crude oil and liquefied natural gas rose 70 percent and 77 percent, respectively, from fiscal 2021, while the value of coal imports shot up 139 percent.
Still, Japan secured an overall current account surplus thanks to a record surplus in primary income, which includes income from foreign investments, such as companies’ receipts of dividends from overseas subsidiaries.
The primary income surplus climbed to 35.56 trillion yen, up 22 percent from fiscal 2021 and hitting a record high for the second consecutive year.
Koya Miyamae, senior economist at SMBC Nikko Securities Co., said Japan’s current account surplus will likely recover to the mid-10-trillion-yen range in fiscal 2023 on the back of growing exports to China and increasing foreign visitors.
The trade balance is expected to improve because the yen has regained some of its strength and resources prices have relatively stabilized in recent months.
In March, the travel balance hit the second-highest monthly level on record as foreign visitors returned to Japan.
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