Japan's Current Account Surplus Sinks 93%

Japan's current account surplus fell 92.8 percent year on year in May to 128.4 billion yen ($944.5 million) due to rising imports caused by Russia's invasion of Ukraine and a falling currency, according to the Finance Ministry on Friday, July 8, 2022, Mainichi Japan reported.

Photo Insert: The Port of Nagoya is the largest and busiest in Japan.

According to preliminary data issued by the ministry, the current account balance, one of the broadest indicators of international commerce, stayed in the black for the fourth consecutive month, but the amount of surplus was the smallest on record for May.

Among important components, the goods trade imbalance increased by 1.9 trillion-yen year on year to roughly 2.0 trillion yen, with imports increasing by 51.3 percent to 9.4 trillion yen for the 16th straight month.

The value of imports was the largest since comparable statistics became available in 1996, driven by higher imports of crude oil, liquefied natural gas (LNG), and coal in the face of soaring energy prices. According to the ministry, the price of crude oil in yen has nearly doubled from a year ago.

Aside from rising energy expenses, the yen's dramatic devaluation versus the US dollar increased import prices. In the reporting month, the dollar increased by 20 yen from the previous year to roughly 129 yen. According to the government, imports from Asia and the Middle East have increased significantly.

Exports increased 19.9 percent to 7.4 trillion yen, marking the 15th consecutive month of growth, led by strong exports of iron and steel, mineral fuels, and electronic components, including semiconductors, with sales to Asia increasing.

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