Wednesday 8 August 2012

JAPAN’S CURRENT ACCOUNT

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JAPAN GETS REPRIEVE AS DROP IN OIL EASES TRADE IMPACT

Andy Sharp

Bloomberg, August 8, 2012

Japan posted a bigger-than-estimated current-account surplus in June as oil prices fell to a low for the year, easing concern that the nation is at immediate risk of needing overseas funding to service its debt burden.

The excess in the widest measure of the nation’s trade was 433.3 billion yen ($5.5 billion), compared with 215.1 billion yen in May, the Ministry of Finance said in Tokyo today. The median estimate of 21 economists surveyed by Bloomberg News was for a surplus of 415.4 billion yen.

The decline in crude prices limited Japan’s fuel bills, as trade figures showed the first drop in imports since 2009, after last year’s earthquake and nuclear meltdown bolstered demand for imported oil. The nation has become more reliant on overseas investment to support its current account with the trade portion in deficit for eight of the last 12 months.

“The rebound pushes back concern that the current account will deteriorate,” said Yoshimasa Maruyama, chief economist at Itochu Corp. (8001) in Tokyo. “There will be no change to the picture that the income surplus will make up for the trade deficit.”

The current account’s trade portion showed a 112 billion yen surplus in June, after an 848.2 billion yen deficit in May. Japan posted a 3.44 trillion yen trade deficit in the fiscal year ended March 31. Income from investment abroad, which includes interest payments and dividends on equities and securities, has served as a buffer against a slide into a current-account deficit.

(...) [artículo aquí]

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