Current Account Surplus Narrows on Slowing Exports as Recovery Moderates

Japan’s current-account surplus narrowed in August as export growth slowed, adding to signs the country’s economic recovery is moderating.

The gap contracted 5.8 percent from a year earlier to 1.114 trillion yen ($13 billion), the Ministry of Finance said in Tokyo today. The median estimate of 21 economists surveyed by Bloomberg News was for a surplus of 1.023 trillion yen. Exports climbed 16.5 percent, while imports gained 20.5 percent.

The government has intervened in the foreign-exchange market and the central bank eased policy on concern the yen’s continuing gains against the dollar will derail Japan’s export- driven recovery. Expiring stimulus packages mean Japan can’t expect the domestic economy to drive growth either, according to economist Yoshiki Shinke.

“There’s no doubt the economy is slowing,” said Shinke, senior economist at Dai-Ichi Life Research Institute in Tokyo. On top of demand that’s slowing in China and other trading partners, “we’ll begin to see the strong yen’s impact on exports very soon,” he said.

Governor Masaaki Shirakawa’s board this week unexpectedly cut the central banks’ benchmark interest rate, pledged to keep borrowing costs at “virtually zero” until price stability returns and established a 5 trillion-yen asset-purchasing fund. Japan’s ruling party proposed an economic stimulus in excess of 4.8 trillion yen that would help local governments and small businesses create jobs.

To contact the reporters on this story: Aki Ito in Tokyo at

To contact the editor responsible for this story: Chris Anstey in Tokyo at

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