Japan Exports Surge, Fueling Current-Account Surplus
Japan posted a current-account surplus in January as exports climbed for a second month, an indication overseas demand is sustaining the nation’s recovery.
The gap was 899.8 billion yen ($9.9 billion) compared with a deficit a year earlier, the Ministry of Finance said in Tokyo today. The median estimate of 26 economists surveyed by Bloomberg News was for a 783.9 billion yen surplus.
The report highlights the role overseas shipments have continued to play in propping up the world’s second-largest economy. Further export gains in coming months will prompt businesses to boost spending on plant and equipment, helping support the rebound, according to economist Akiyoshi Takumori.
“This confirms that the economy is recovering, led by solid overseas demand,” said Takumori, chief economist at Sumitomo Mitsui Asset Management Co. in Tokyo. “Although the level is still low, the recovery will fuel production and make companies more comfortable with increasing investment.”
Today’s data adds to signs of sustained expansion in the first quarter. Factory production rose at the fastest pace since May and the unemployment rate fell to a 10-month low in January. The Finance Ministry said last week capital spending also fell 18.5 percent in the three months ended Dec. 31. While that was the 11th straight decline, it was also the smallest drop in a year.
The current-account gap increased by 1.032 trillion yen from a year earlier, the second highest jump since comparable data were made available in 1986, the government said. Exports rose 40.6 percent in January from a year earlier, also the biggest advance since 1986, and imports advanced 7.1 percent.
China Shipments
Shipments to China rose at the fastest pace since 1985 in January, while exports to the U.S. advanced for the first time in more than two years, customs-cleared trade data showed last month. Today’s figures don’t include regional breakdowns.
The export rebound has been driven in part by favorable year-on-year comparisons. Shipments had plunged last year in the wake of a global credit crunch caused by the collapse of Lehman Brothers Holdings Inc. Japan posted its first current-account deficit in 13 years in January 2009 as a result.
Overseas shipments of Nissan Motor Co. cars rose 29.6 percent in January, while Mitsubishi Motor Corp. shipped more than double the amount of vehicles compared with the same month a year ago, according to the Japan Automobile Manufacturers Association.
Economy Expanded
The Cabinet Office will say the economy expanded at a revised 4 percent annualized pace last quarter, according to the median estimate of 27 economists surveyed by Bloomberg News. Preliminary figures showed 4.6 percent growth. The report is due on March 11 at 8:50 a.m. in Tokyo.
“Right now the economy is being pulled by exports and inventory adjustments,” Naoki Iizuka, a senior economist at Mizuho Securities Co. in Tokyo, said before the report was released. “Once we enter the second quarter, manufacturers’ capital spending will be a new contributor to the economy’s growth.”
A separate report today showed bank lending fell for a third consecutive month in February, sliding 1.6 percent from a year earlier, as companies cut spending.
On a seasonally adjusted basis, the current-account surplus widened to 1.71 trillion yen in January. Exports rose 8.8 percent from December, and imports climbed 2.3 percent.
The income surplus, the difference between money earned abroad and payments made to foreign investors in Japan, narrowed 8.1 percent to 911 billion yen in January from a year earlier, the ministry said.
The current account tracks the flow of goods, services and investment income between Japan and its trading partners. It includes trade not shown in the customs-cleared balance.
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