Japan Books 6th Straight Current-Account Surplus in December

Japan reported a sixth straight monthly surplus in its broadest measure of trade in December, aided by stronger exports and a lower energy bill.

The current-account balance was in a surplus of 187.2 billion yen ($1.6 billion), swinging from a 679.9 billion yen deficit a year earlier, the finance ministry said Monday in Tokyo. This compares with a median forecast of 355.8 billion yen.

Income from investments abroad helped shore up the balance that has suffered from trade deficits almost every month back to early 2012, when Japan’s nuclear disaster sent imports of fossil fuels soaring. The tumble in oil prices since mid-2014 is good news for a country that imports almost all its energy, according to economist Kiichi Murashima.

“This is a game changer for Japan’s external balance,” said Murashima at Citigroup Inc. “The modest pickup in the global economy will continue to push up Japan’s exports.”

The yen has declined 29 percent against the dollar since Prime Minister Shinzo Abe took office in December 2012 with a pledge to revive the world’s third-biggest economy with his reflationary Abenomics policies. The currency was up 0.2 percent at 118.89 per dollar at 9:23 a.m. in Tokyo, while the Topix index rose 0.7 percent.

Oil Importer

Exports rose 19 percent from a year earlier, while imports increased 6.7 percent, leaving a trade deficit of 395.6 billion yen in December. The surplus in income generated from Japan’s direct investment overseas and holdings of foreign securities rose to 1.02 trillion yen, helping keep the current-account balance out of deficit.

The value of Japan’s crude oil imports declined 22 percent in December from the same month a year earlier. The price of oil has fallen by about half from last year’s high in June.

“Japan is nearly a pure oil importer,” said Kazuhiko Ogata, an economist at Credit Agricole SA. “The drop in the oil price should be quite positive for the Japanese economy, positive for real purchasing power for the household sector and even for the corporate sector as well.”

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