Japan’s Current-Account Surplus Shrinks to Record Low

Japan’s current-account surplus shrank last fiscal year to the smallest on record, highlighting challenges for Prime Minister Shinzo Abe in driving a recovery in the world’s third-largest economy.

The surplus of 789.9 billion yen ($7.74 billion) in the year ended March was the smallest in data back to 1985, the Ministry of Finance said in Tokyo today. A 14 percent surge in primary income from overseas investments helped make up for a shortfall in the balance of trade and services that suffered from weak exports and a higher import bill.

A slide into sustained deficits in Japan’s widest gauge of trade could make the government more reliant on foreign funding to service the world’s biggest debt burden. Keeping the balance in the black depends on how successful Japanese companies are in boosting exports following the yen’s slide and their ability to generate higher returns on overseas investments, according to economist Izumi Devalier.

Bloomberg

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