Japan’s current account surplus declined by 23.4% on year-on-year (y/y) basis to JPY1.4 trillion (US$12.6 billion) on a non-seasonally adjusted basis in August. The surplus fell by 3.8% from the previous month to JPY1.5 trillion on a seasonally adjusted basis for the fourth consecutive month of decline.
Higher oil prices and weak external demand could continue to weigh on Japan’s current account surplus, although continued overseas investment and the weaker yen are likely to underpin a net inflow of primary income.
The continued y/y decline reflected a weaker trade balance, recording a deficit of JPY219 billion versus a surplus of JPY335 million in the previous year. The decline is due largely to a 17.5% y/y rise for imports, boosted by higher energy prices even as export growth rose to 7.6% y/y, largely to increases for semiconductor machinery and transport equipment.