Japan Current Account Surplus Grows in First Half of Year

Japan’s current account surplus grew 0.6 percent from a year earlier to 3,211.4 billion yen for the six months through June, marking the first rise in five half-year periods, government data showed Thursday.

The result was driven by growth in direct investment income, which more than offset a trade deficit on increasing fuel imports.

However, the surplus in the balance, one of the widest gauges of international trade, was the second lowest on a first-half basis since comparable data became available in 1985.

The income account, which reflects how much Japan earns from its foreign investments, stood at a surplus of 8,678.3 billion yen, up 19.3 percent on the year and the largest for any half-year period since 1985, boosted by higher dividends and profits from securities investments on the back of the yen’s recent depreciation.

Goods trade saw a deficit of 4,238.2 billion yen — the biggest for any half-year period — as imports increased 8.6 percent to 36,914.1 billion yen on the currency’s weakening, outweighing growth in exports. Exports for the six-month period rose 3.5 percent to 32,675.9 billion yen.

A weakening yen usually boosts the competitiveness of Japanese exporters and increases the value of overseas revenue in yen terms, but it also pushes up import costs.

via Mainichi

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza