business

Japan's current account surplus surges in March

11 Comments

Japan on Wednesday logged a more than 20-fold surge in its current account surplus in March thanks to an improving trade picture and buoyant returns on the country's investments abroad.

The 2.80 trillion yen figure was well up from the 131 billion yen a year earlier, and marked the nine monthly surplus in a row, according to official data.

The latest figures were also the biggest since March 2008.

Japan's current account is the broadest measure of its trade with the rest of the world, including both goods and services, tourism and returns on foreign investment, which jumped 30% in March from a year ago.

The data comes after Japan posted its first monthly trade surplus in almost three years as North American exports soared and energy bills fell, giving a psychological boost to Tokyo's attempts to revive the flagging economy.

Japan's trade balance in March recovered to a 671 billion yen surplus, reversing a 1.18 trillion yen deficit, the finance ministry said Wednesday, "as the volume of crude oil imports declined despite falls in prices and as the value of imports significantly declined".

The import decline was partly due to the Chinese Lunar New Year coming in late February this year, rather than January, meaning shipments from Japan's major trading partner fell.

"The surge in the current account mostly reflects a return of the trade balance into surplus," Capital Economics said in a commentary.

"However, we think that the March trade surplus was inflated by the unusually late timing of Chinese New Year." Japan's trade balance had been wallowing in the red owing to its heavy dependence on importing fossil fuels to generate electricity after it shut its stable of nuclear reactors in response to the 2011 tsunami-sparked Fukushima atomic accident.

© 2015 AFP

©2019 GPlusMedia Inc.

11 Comments
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tourism near record levels, repatriated profits up, something thats not possible with a high yen. Just goes to show a low yen is more beneficial to Japan than the other way around, those import lovers and those sending there salaries back home will still complain. but hey theyre doing very little to help the J economy anyways

-3 ( +4 / -7 )

Was there any trade in April? We are in mid May and getting recycled data for March.

-3 ( +0 / -3 )

wtfjapanMay. 13, 2015 - 03:29PM JST

tourism near record levels, repatriated profits up, something thats not possible with a high yen

In the long run though it doesn't resolve any of the real problems of the Japanese economy. It's a bit like you've maxed out on your credit card and you have no funds, and the bank increases your credit limit to resolve the problem.

-2 ( +2 / -4 )

Bad figures, I told you so; good figures, it ain't gonna last; better figures again, Gov are manipulating the figures..

-3 ( +1 / -4 )

so maybe the yen should be back at 80yen/$1 well see how the Japanese economy is looking then!

-1 ( +0 / -1 )

"It's a bit like you've maxed out on your credit card and you have no funds, and the bank increases your credit limit to resolve the problem."

Nice analogy! LOL. But let's make this quaint, homespun metaphor more accurate. Let's imagine you have the sole authority to issue the money you're spending, while a big portion of your debts are held by yourself or by people and institutions you have the power to control.

Meanwhile, you also happen to be the biggest creditor in your neighborhood. Plenty of folks about there owe YOU money. Sweet.

Now, how worried would you be, exactly?

1 ( +3 / -2 )

@JeffLee

You are right. You wouldn't be worried because you would be the government, which never has to worry about losses. And that's the point. We are not the government. We are the ones that have to pay the debts of the "biggest creditor" that is giving endless credit to itself. Imagine a gambling addict that can conjure money from nowhere and conveniently has a "friend" that he uses to pay any losses. We and generations to come are that hapless "friend."

0 ( +3 / -3 )

Let's imagine you have the sole authority to issue the money you're spending,

You do, but if you have to issue money in order to spend money it, people who are not dopey understand that the decreasing scarcity of the money means that its real value decreases. If your people need to import, say, all of their energy and more than 60% of their food, this could actually matter to them. They could at any point opt to dump their increasingly worthless local currency for hard currency, expediting the decrease in demand and thus value of it.

while a big portion of your debts are held by yourself or by people and institutions you have the power to control.

Unless one's role model is North Korea, you can't stop your young productive people from leaving the country for greener pastures, where there is less generational inequality. Your people and institutions do have choices.

Plenty of folks about there owe YOU money. Sweet.

They don't owe you money, they owe people who currently choose to use the currency your central bank controls the supply of. So unless you plan to seize the assets of your people in order to "pay them back", that's no comfort at all.

2 ( +3 / -1 )

Well said fxgai!

0 ( +1 / -1 )

"They don't owe you money"

Sure they do. Who is one of the hottest purchasers of US debt right now? Yes, the GPIF, which is YOURS. Isn't it odd how everyone says you've got no money of your own, when you're the biggest foreign purchase of THEIR debt. Oh, the irony (and ignorance)

"people who are not dopey understand that the decreasing scarcity of the money means that its real value decreases."

and yet it remains the world's safe haven currency, despite all the spending and printing that you lot said would trigger a "crisis of confidence in the financial markets"

"We are not the government"

But we are, according to Gary's analogy. YOu know, the one about "maxed out" credit cards. LOL.

-2 ( +0 / -2 )

Who is one of the hottest purchasers of US debt right now?

At current rates, Japan's holdings of US debt is equivalent to a paltry 10% of the outstanding Japanese public debt mountain, which just keeps on growing.

So... so what? Is that the best you have?

Oh, the irony (and ignorance)

10 to 1. Yes, the irony and the ignorance...

and yet it remains the world's safe haven currency, despite all the spending and printing

Past performance is not a guarantee of future results. Or something like that.

-1 ( +0 / -1 )

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