TOKYO (MNI) – Japan’s current account posted a surplus of Y1.96
trillion in September, up 24.3% from a Y1.58 trillion surplus a year
earlier, finance ministry data showed Tuesday. This marked the first
year-on-year rise in two months as the trade surplus widened after
showing the first y/y drop in 15 months in August, the ministry said.

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, which in turn pushed
up the overall current account balance, it said.

The latest current account balance came in higher than the
consensus call of a Y1.66 trillion surplus. It followed surpluses of
Y1.114 trillion in August (-5.8% y/y), Y1.676 trillion in July (+26.1%)
and Y1.058 trillion in June (-17.3% y/y). In May, the surplus shrank
6.8% to Y1.223 trillion, the first year-on-year drop since July 2009
(-15.3%).

The larger current account surplus in September this year was due
to gains in trade surplus (exports grew at a faster pace than imports
compared with year-earlier levels) and income surplus, which more than
offset a wider services account deficit.

The September trade balance showed a surplus of Y926.9 billion, up
53.2% from a surplus of Y604.9 billion a year before.

In August, the trade surplus fell 35.2% y/y to Y195.9 billion,
marking the first y/y drop in 15 months.

Exports rose 15.9% year-on-year to Y5.55 trillion in September. The
pace of y/y gains slowed from +16.5% in August, +24.7% in July, +29.1%
in June and a record rise of +47.7% in February (the largest gain under
the current formula dating back to 1986).

It was the 10th 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 (+12.0%
y/y in September), ships (+43.5%) and iron and steel products (+19.4%).

Imports increased 10.5% year-on-year to Y4.62 trillion in
September, posting the ninth consecutive y/y gain after +20.5% in
August, +15.7% in July, +29.7% in June and recovering from the record
44.9% drop in February 2009.

On a customs-cleared basis, the import rise was led by liquified
natural gas (+28.9% y/y in September), iron ore (+73.8%) and coal
(+22.7%) but the year-on-year growth in imported energy costs is
decelerating.

The price of crude oil rose 4.1% from a year earlier to $75.97 a
barrel in September (vs. +9.8% y/y in August) while the Japanese
currency appreciated by 7.8% from a year before to an average Y84.38 to
the dollar during the month (vs. +9.9% in August).

The services account — including transport, travel and financial
services — posted a deficit of Y69.9 billion in September, widening
from a deficit of Y33.2 billion a year earlier.

The combined goods and services accounts were in surplus by Y857.1
billion in September, up from the surpluses of Y571.8 billion a year
before and Y101.0 billion in the previous month.

The income account posted a surplus of Y1.18 trillion, up from the
surplus of Y1.08 trillion a year earlier and Y1.11 trillion in the
previous month.

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

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