Japan posted a fourth straight current-account surplus in May, as income from overseas investments outweighed a trade deficit. The excess in the widest measure of trade was 522.8 billion yen ($5.1 billion), the Ministry of Finance reported in Tokyo today. This compared with the median forecast of 417.5 billion yen in a Bloomberg News survey of 28 economists.
Imports fell for the first time in 19 months, as consumers cut spending after a sales-tax increase in April, while exports remained sluggish, highlighting how manufacturers can’t rely on the yen’s slide against the dollar for support. Prime Minister Shinzo Abe’s task is to steer the world’s third-largest economy through the aftermath of the levy increase.
“Sluggish domestic demand after the sales-tax hike is reflected in the weak imports,” said Koya Miyamae, senior economist at SMBC Nikko Securities Inc. in Tokyo. “Exports hold the key” to a recovery in Japan’s external balance, he said.