TOKYO (MNI) – Japan’s current account posted a surplus of Y1.205
trillion in May, down 8.1% from the surplus of Y1.311 trillion posted a
year earlier, when exports were already recovering from the sharp
decline seen in early 2009, the Ministry of Finance said on Thursday.

The last time Japan posted a year-on-year drop in its current
account surplus was in July 2009, when it shrank by 15.3%.

The March current account balance came in lower than the consensus
call for a Y1.334 trillion surplus. It followed a surplus of Y1.242
trillion in April this year (+88.0% y/y).

In June 2009, the current account surplus showed its first
year-on-year gain in 16 months, a 171.3% rise to a surplus of Y1.279
trillion. The balance has recovered from the record deficit of Y132.7
billion posted in January 2009, which had been the first shortfall in 13
years.

The narrower current account surplus in May this year was due to
smaller trade and income surpluses compared with year-earlier levels.

The May trade balance showed a surplus of Y391.0 billion, down 0.6%
from a surplus of Y393.5 billion a year before.

This followed a 414.2% surge in the trade surplus to Y859.1 billion
in April and a record y/y rise of 745.4% to a surplus of Y1.074 trillion
in March.

Exports rose 33.8% year on the year to Y5.03 trillion in May. The
pace of y/y gains slowed from +42.7% in April, +45.4% in March and a
record rise of +47.3% in February (the largest gain under the current
formula dating back to 1986).

It was the sixth straight year-on-year rise in exports after
posting the first y/y gain in 15 months in December 2009, when exports
rose 11.8%.

Exports have recovered from the record 50.5% plunge in February
2009.

Based on customs-cleared data from the MOF’s monthly trade report
released last month, the rise in exports was led by automobiles (+51.9%
y/y in May), iron and steel products (+73.7%) and semiconductors
(+25.6%).

Imports increased 37.8% year-on-year to Y4.64 trillion in May,
posting the fifth consecutive y/y gain after +26.1% in April and
recovering from the record 44.9% drop hit in February 2009.

On a customs-cleared basis, the import rise was led by petroleum
(+49.0% y/y in May), liquefied natural gas (+63.5%) and non-ferrous
metals (+130.3%).

The price of crude oil surged 62.6% from a year earlier to $84.97 a
barrel in May while the Japanese currency appreciated by 4.7% from a
year before to an average Y91.74 to the dollar during the month.

The services account — including transport, travel and financial
services — posted a deficit of Y43.8 billion in May, shrinking from a
deficit of Y143.9 billion a year earlier.

The combined goods and services accounts were in surplus by Y347.2
billion in May, compared with a surplus of Y249.5 billion a year before.

The income account posted a surplus of Y928.7 billion, down from a
surplus of Y1.18 trillion a year earlier. The net balance for direct
investment income fell from a year before while that for portfolio
investment income rose.

tokyo@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5408-4833 **

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