Japan’s current-account surplus narrowed less than economists forecast in September, a sign that the economy sustained its recovery from March’s record earthquake.
The gap shrank 21.4 percent from a year earlier to 1.585 trillion yen ($20.4 billion), the Finance Ministry said in Tokyo today. The median estimate of 19 economists surveyed by Bloomberg News was for a 31.3 percent decline.
Japanese manufacturers have been restoring operations since the disaster disrupted production and supply chains. Corporate sentiment has been improving and overseas shipments are rising despite a currency near a postwar high against the dollar and fiscal woes in Europe, bolstering the nation’s recovery from a three-quarter slump in gross domestic product.
“Exports rose at the end of September, perhaps because of an increase in the production of auto parts,” Mari Iwashita, chief market economist at SMBC Nikko Securities Inc. in Tokyo, said before the report. “The recovery is ongoing, but its pace is slowing down.”
Japan’s economy probably expanded at an annual 5.8 percent rate in the third quarter, according to the median forecast of 23 economists surveyed by Bloomberg News. A separate survey of economists shows growth may slow after that as the strong yen curbs corporate profits and sentiment just as Europe’s debt crisis erodes demand in Japan’s overseas markets.
“Production has rebounded dramatically since the earthquake, but recently the pace of recovery has been slower, mainly because of the strong yen and slower global growth,” Akira Maekawa, a senior economist at Global Futures & Forex Ltd, said before the report. “There is a strong correlation between Japanese production and Japanese exports.”
The yen traded at a postwar high of 75.35 yen against the dollar on Oct. 31, prompting the finance ministry to intervene for the first time since Aug. 4. Analysts at Barclays Bank Plc and Totan Research Co. estimate a record 8 trillion yen was sold, based on current account data at the Bank of Japan.
Toyota Motor Corp. President Akio Toyoda this week called on the government to take action to protect jobs threatened by the strong yen. Carlos Ghosn, chief executive officer of Nissan Motor Co., said in an interview in Rio de Janeiro on Oct. 7 that the nation faces a “hollowing out” of its industrial base if the government fails to counter the yen’s ascent.
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