World Economy

Japan Reports Current Account Surplus

Japan saw a services trade surplus of ¥42 billionJapan saw a services trade surplus of ¥42 billion

Japan reported a current account surplus of ¥1.94 trillion ($17.6 billion) in May, marking the 47th straight month of black ink thanks to a surge in returns on foreign investments, government data showed Monday.

The surplus in the current account—one of the widest measures of international trade—widened 14.5% from a year earlier despite registering a deficit in goods trade for the first time since January, Kyodo reported.

Goods trade had a deficit of ¥304 billion, up nearly three-fold from a year prior, as rising imports outpaced an increase in exports, according to a preliminary report released by the finance ministry.

Imports were up 13.7% to ¥6.63 trillion, due in part to higher crude oil prices and an upswing in demand for foreign-made aviation equipment, while exports rose 10.6% to ¥6.32 trillion amid strong demand for manufacturing equipment for the tech industry.

Japan saw a services trade surplus of ¥42 billion as a continuing influx of visitors from overseas lifted the travel surplus to ¥211 billion, the largest figure on record for May.

Primary income, which reflects how much the country earns from overseas investments, registered a surplus of ¥2.4 trillion, up 23.2%.

That jump was part of a continuing trend, although a ministry official said there was also a one-time boost from an unnamed company that saw a surge in dividends from an overseas subsidiary.

Meanwhile, the pace of wage gains in Japan is accelerating markedly, thanks to the exceptionally tight labor market, Bloomberg reported.

Earnings jumped in May as the results of spring wage talks came in and the jobless rate hit a quarter-century low. To be sure, stronger and sustained raises are needed for the Bank of Japan to hit its 2% inflation goal, and higher incomes have yet to boost consumer spending.


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