Japan posted its smallest current account surplus on record last year in a worrying sign that sluggish exports and the rising cost of energy imports will hamper economic growth.
The deteriorating external position is also bound to put the spotlight back on Japan’s ability to service its huge debt, which at over twice the size of its economy is the worst in the industrialized world.
The Ministry of Finance data on Monday also showed the current account balance for December slid to the largest deficit on record as exporters failed to reap the benefits of a weak currency. Many policy makers expected a falling yen would push up exports and support the economy but lackluster external demand and declining competitiveness have hampered the trade sector.
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