Japan witnesses highest current account surplus in 9 years on lower crude prices

Japan witnessed the highest current account surplus in almost nine years during the six months period ended June, 2016 following reduced imports amid lower crude oil prices, buoyed by rise in earnings from the tourism sector, government data showed Monday.

Japan’s current account balance marked a surplus of JPY10.63 trillion (USD104 billion) during the period of January to June, up 31.3 percent from a year earlier, data released in a preliminary report by the Finance Ministry showed Monday.

The balance of goods trade marked a surplus of 2.35 trillion yen, a turnaround from a deficit of 375.4 billion yen the previous year, with exports sliding 10.8 percent while imports plunged 17.8 percent from the previous year, the Ministry added in its report.

In the six-month period, the surplus in the primary income account, which reflects how much Japan earns from its foreign investments, fell 7.9 percent to JPY9.61 trillion, as a firming yen curved profits in foreign investments.

On the back of a continued increase in the number of foreign tourists, the travel balance registered a surplus of JPY775.8 billion, the largest since 1996. However, the service sector, also including passenger transportation and cargo shipping, registered a deficit of JPY209.9 billion, down sharply from a deficit of JPY933.3 billion a year earlier.

For June alone, Japan logged a current account surplus for the 24th consecutive month in June, with the balance standing at JPY974.4 billion. Goods trade registered a surplus of JPY763.6 billion. Meanwhile, the primary income surplus, which counts income on foreign direct investment and securities investment, narrowed 35 percent on year in June to JPY417.5 billion.