Japanese current account surplus soars on import drop

15 Jan, 2004

Japan's current account surplus soared in November, data showed on Wednesday, but the rise was mostly due to a slump in imports as exports also declined.
The current account, the broadest measure of trade in goods and services, climbed 33.8 percent from a year earlier to 1.4965 trillion yen ($14.08 billion), the Finance Ministry said.
That was higher than the median forecast of about 1.3 trillion yen in a Reuters poll.
Data showed exports fell 1.8 percent but imports slumped by a greater 5.4 percent, boosting the trade surplus by 9.4 percent to 1.1567 trillion yen.
Economists warned against reading too much into the fall in exports since it appeared affected by a big increase in the same month a year earlier following the end of a strike at US ports.
Most said they expected the trade surplus to keep growing in the months ahead as domestic demand remained stagnant, lagging behind a rise in exports.
"The US economy is still looking pretty strong and demand from the rest of Asia should be quite firm as well, so the trade surplus should stay as it is for a while," said Seiji Adachi, economist at Credit Suisse First Boston Securities.
"Imports should eventually rise as the Japanese economy recovers but that is going to take more time."
Some said the value of imports would jump in the months ahead due to a rise in oil prices, but that the impact on the overall trade balance should be offset by a strong yen.
Markets showed little reaction and the dollar hardly budged from late US levels, trading around 106.30 yen. Traders cited nervousness that Japanese authorities could intervene again to curb the yen's surge.

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