June 26, 2022

The Japanese Finance Ministry on Tuesday reported the country’s current account surplus for September to fall 31.1 percent from a year earlier. Such a degrading result has come as the trade balance worsened over slow car exports and higher energy import costs.

According to the ministry’s preliminary report, the current account balance, marked a surplus of 1.0 trillion yen ($9.1 billion), logging a 15th consecutive month of black ink. The surplus, in August posted a 21.8 percent decline.

The country’s goods trade balance registered a deficit with 229.9 billion yen in red ink for the second successive month, down from a 906.7 billion yen surplus in the previous year.

According to a ministry official, it attributed the trade deficit to a 40.3 percent year-on-year drop in car exports. While increased purchases of energy resources pushed up by surging crude oil prices as well as medicines as demand for coronavirus vaccines grew.

The Japanese automakers’ output reductions due to supply chain disruptions caused by factory shutdowns in Southeast Asia amid surging coronavirus cases and the prolonged global semiconductor shortage led to the country’s declining car exports.

Summary of current account earnings

• In the reporting period, the country’s services trade balance recorded a deficit of 257.0 billion yen, down from 208.3 billion yen a year earlier.
• The travel surplus fell to 15.2 billion yen from the previous year’s 20.8 billion yen. This was due to international travel restrictions amid the pandemic that continued to suppress the number of inbound travelers.
• In the meantime, the surplus in primary income, which reflects returns on overseas investments, rose 13.9 percent to 1.8 trillion yen.

According to the official, the finance ministry had previously mentioned that the country’s current account balance was in the black for 86 straight months in August.

However, an annual retroactive revision on a component of its primary income saw the same balance from last year in June to turn red.

Japan for the April-September period ran a current account surplus of 8.0 trillion yen, up 39.8 percent from the same period last year.