— Japan Nov C/A Surplus -15.7% Y/Y Vs MNI Consensus -11.3%
— Japan Nov Current Acct Surplus at Y926.2 Trln
— Japan Nov Trade Surplus -46.6% Y/Y, 2nd Y/Y Drop In Row

TOKYO (MNI) – Japan’s current account surplus shrank by a
larger-than-expected 15.7% from a year before, marking the first y/y
drop in three months and caused by a sharp drop in the trade surplus,
data released by the Ministry of Finance showed Wednesday.

The current account surplus stood at Y926.2 billion in November
2010, down 15.7% from Y1.0 trillion in November 2009. It was weaker than
the median forecast in a Market News International survey for a rise of
-11.3% to Y975 billion.

The November surplus declined mainly because the trade surplus
slumped 46.6% on year to Y259.7 billion, posting the second straight
year-on-year drop, after the 2.6% fall in the previous month.

In August 2010, the trade surplus fell 43.5%, marking the first y/y
drop in 15 months, but it rebounded by 50.6% in the following month.

The income account — the largest component of Japan’s current
account — showed a wider surplus thanks to higher dividends from
overseas firms and increased re-invested earnings. The surplus rose
13.0% on year in November, accelerating from +3.9% in October.

The latest current account balance followed surpluses of Y1.436
trillion in October (+2.9% y/y), Y2.018 trillion in September (+28.0%)
and Y1.143 (-3.4%) in August. In May 2010, the surplus fell 6.8% to
Y1.223 trillion, the first year-on-year drop since July 2009 (-15.3%).

The November trade balance showed a sharp drop as imports rose
15.7% on year, surpassing export growth at +9.3%.

Based on customs-cleared data from the MOF’s monthly trade report
released last month, the rise in exports was led by iron and steel
(+21.2% y/y in November), metal-processing equipment (+107.3%) and power
generating machinery (+18.5%).

The import rise was led by iron ore (+82.9%), audio visual
equipment (+44.4%) and liquefied natural gas (+17.8%).

The services account — including transport, travel and financial
services — posted a deficit of Y99.3 billion in November, compared with
a deficit of Y45.9 billion a year earlier.

The combined goods and services accounts were in surplus by
Y160.4 billion in November, down 63.6% on year, posting the first drop
in three months.

tokyo@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5408-4835 **

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