Japan Current-Account Surplus Plunges to Record August LowJames Mayger and Keiko Ujikane
Japan’s current-account surplus unexpectedly shrank to a record low for an August, underscoring drags on the economy as Prime Minister Shinzo Abe tries to drive an exit from 15 years of deflation.
The surplus fell 64 percent from a year earlier to 161.5 billion yen ($1.7 billion), as overseas income dropped for the first time in nine months and imports exceeded exports, a Ministry of Finance report showed in Tokyo. The median forecast in a Bloomberg News survey of 27 economists was for a 520 billion yen surplus.
Higher import costs are one of the side-effects of Abenomics, a package of policies that has weakened the yen and is intended to drive an economic revival. The next phase of the prime minister’s growth strategy will be the focus of a Diet session due to begin next week.
“There’s a low chance that the current-account balance will turn to a deficit in the coming months,” said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo.
The Nikkei 225 Stock Average fell 0.7 percent as of 10:05 a.m. in Tokyo.
The surplus was the lowest for any August since at least 1985, according to data compiled by Bloomberg.
The Bank of Japan last week refrained from adding to unprecedented monetary stimulus after business confidence surged and Abe decided the economy was strong enough to weather a sales-tax increase. Governor Haruhiko Kuroda’s board retained a goal of expanding the monetary base by 60 trillion to 70 trillion yen ($720 billion) a year.
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