Japan’s current-account deficit widened to a record in December on soaring imports, adding to Prime Minister Shinzo Abe’s challenges as he tries to drive a recovery in the world’s third-biggest economy.
The 638.6 billion yen ($6.2 billion) shortfall surpassed November’s gap of 592.8 billion yen, the finance ministry said in Tokyo today. The deficit was smaller than the 685.4 billion yen median forecast of 27 economists in a Bloomberg survey. Comparable data go back to 1985.
The yen’s slide and increased demand for foreign energy due to nuclear plants closures are causing imports to outstrip exports, dragging on an economy that is forecast to contract after the government lifts a sales tax in April. A surplus in overseas investment income is staving off the risk of a sustained deficit that could undermine investor confidence in a nation with the world’s largest debt burden.
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