The Japan Times – May 12, 2016 – The nation’s current account surplus doubled in fiscal 2015 from the previous year to ¥17.98 trillion, buoyed by lower crude oil prices and a surge in travel surplus on the back of a growing number of foreign tourists, the government said Thursday.
Cheap crude oil helped reduce goods imports despite slower exports, helping to turn around the trade balance to a surplus of ¥629.9 billion in fiscal 2015, a reversal from a deficit of ¥6.59 trillion in fiscal 2014.
The current account surplus, one of the widest gauges of international trade, hit the highest in five years, as imports plunged 11.8 percent to ¥72.51 trillion, while exports dropped 3.3 percent to ¥73.14 trillion, the Finance Ministry said in a preliminary report.
Japan has been relying heavily on energy imports since the March 2011 Fukushima nuclear disaster, with most of the country’s commercial reactors remaining offline amid heightened public concern about their safety.
The value of crude oil imports slid 37.9 percent as average oil prices nearly halved to $48.71 per barrel in fiscal 2015. The value of liquefied natural gas imports shed 41.4 percent.
Japan also registered a travel surplus of ¥1.27 trillion, five times higher than the previous year and the highest since fiscal 1996, when comparable data became available. The surge reflected soaring numbers of tourists — up 45.6 percent in fiscal 2015 from the previous year to a record 21.36 million.
Helped by the travel surplus and a record-high royalties surplus of ¥2.42 trillion, the deficit in the services balance more than halved to ¥1.21 trillion, the smallest since fiscal 1996. The figure also included passenger transportation and cargo shipping.
The surplus in the primary income account, which reflects how much Japan earns from foreign investments, increased 2.9 percent to ¥20.56 trillion, due mainly to a rise in profits from direct and securities investments amid the yen’s depreciation.
“The current account surplus is likely to continue to remain at a high level but there are some concerns,” said Satoshi Osanai, an economist at the Daiwa Institute of Research, citing a slow recovery in exports, a rebound in crude oil prices, and the yen’s appreciation.
As the yen has been strengthening in the past six months, it is likely to push down the value of overseas income when repatriated, while sluggish overseas economic recovery is expected to weigh on Japan’s exports, Osanai said.
In fiscal 2015, the yen fell 9.5 percent against the U.S. dollar to ¥120.13 from the year before, the ministry said.
In March alone, Japan posted a current account surplus for the 21st consecutive month, with the balance standing at ¥2.98 trillion. Goods grade registered a surplus of ¥927.2 billion for the second straight month of black ink.