Japan posted a current account surplus in February thanks to a stronger US economy, official data said, reversing a record deficit in January, although the figure was still down 30.7 percent year-on-year.
The latest reading, the broadest measure of Japan’s trade with the rest of the world, was largely because of rising shipments to the key US market, particularly vehicles, a positive sign for the world’s third-biggest economy.
“The recovery of the US economy, seen in its healthy new car sales, is contributing to the surplus,” said Satoshi Osanai, an economist at Daiwa Institute of Research. “Figures in January and February tend to swing for seasonal factors, such as the Chinese New Year [holiday], but a recovery from the Thai floods also helped Japan’s current account to swing back to a surplus.”
Manufacturers with plants in Thailand were hammered by record flooding in the Southeast Asian nation last year, which came as domestic firms were recovering from Japan’s devastating quake-tsunami disaster in March last year.
In February, Japan’s current account stood at ￥1.18 trillion (US$14.48 billion), the Japanese Ministry of Finance said.
The figure was 30.7 percent lower than the same month a year earlier, but largely in line with a ￥1.15 trillion surplus tipped in a poll of economists by Dow Jones Newswires and the Nikkei Shimbun.
The current account measures the value of a country’s imports and foreign investments against the value of its overseas income such as exports of goods and services.
Overall, exports in the month were 2 percent lower, while imports grew 11.1 percent on soaring energy costs.
Japan has had to steadily increase energy imports as utilities turn on thermal power plants while atomic reactors stay offline amid public opposition following the Fukushima Dai-ichi nuclear power plant disaster.
Japan’s merchandise trade balance — a key component of the current account — came to a ￥102.1 billion surplus in February after four months in the red, the ministry said. That was still down 85.8 percent from a year earlier.
“Concerns over a stronger yen are receding gradually,” Osanai said. “Risks now are soaring prices for resources and a slowdown of the global economy, which would make a recovery of Japan’s manufacturing sector also slower.”
In January, Japan logged a record ￥437.3 billion current account deficit. That was its first deficit since January 2009, when it posted a then-record shortfall of ￥132.7 billion at the height of the global financial crisis.