Current-Account Widens More Than Forecast as Firms Withstand Stronger Yen
Japan’s current-account surplus widened more than forecast in July as export gains outpaced imports, suggesting that companies are so far withstanding the impact of the nation’s appreciating currency.
The gap expanded 26 percent from a year earlier to 1.676 trillion yen ($20 billion), the Ministry of Finance said in Tokyo today. The median estimate of 22 economists surveyed by Bloomberg News was for a surplus of 1.535 trillion yen. Exports climbed 25 percent, while imports advanced 16 percent.
Japan’s economic recovery from its deepest postwar recession has relied on trade, and the advance in shipments abroad indicates that support remains intact. Slowing economies overseas and a surge in the yen to a 15-year high against the dollar this month have stoked concern that Japanese growth will falter in the second half of 2010.
“Japan’s domestic demand isn’t strong enough to cushion a global slowdown with little growth in the labor market and wages,” Hiromichi Shirakawa, chief Japan economist at Credit Suisse Group AG in Tokyo, said before the report.
The Bank of Japan last week boosted a bank-lending facility in the wake of the yen reaching the highest level since 1995. Governor Masaaki Shirakawa and his policy board yesterday left the program at 30 trillion yen, while saying they were open to taking further measures if necessary.
To contact the reporters on this story: Toru Fujioka in Tokyo at tfujioka1@bloomberg.net;
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