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Japan Current Account Surplus Up 23%

October 06, 1995|From Reuters

TOKYO — Japan's massive surplus in its current account, its broadest measure of trade in goods and services, rose sharply in August on a wave of investment funds and income flowing into the country.

The government announced Thursday that the surplus surged 23% to $7.58 billion in August from $6.16 billion a year earlier, although the surplus in the narrower measure of merchandise trade actually shrank slightly.

The overall rise, attributed partly to a surge of foreign interest in Japanese investments, confounded many economists' predictions of a barely changed surplus.

Despite the unexpected blip, economists said they believed that Japan's surplus, a source of friction with the United States and other trading partners, was still on a long-term downward trend.

They noted that the August surplus in merchandise trade dropped to $8.70 billion from $8.76 billion a year earlier, pressured by a flood of imports in response to the strength of the yen.

"The basic trend of the trade balance is still down. Based on the quantity, the average monthly pace of growth in imports is much faster, at 20%, than the pace in exports, at 10%," said Youichi Nakagawa, economist at Bank of Tokyo.

Japan's Ministry of Finance issued a statement saying the current account surplus basically remained on a downward track.

Yasunari Ueno, chief market economist at Fuji Securities Co., said the current account surplus had risen because Japan's deficit in "invisible trade"--money flows not related to physical goods--had narrowed.

Invisible trade includes funds arising from shipping, tourism and banking, and is combined with trade in actual goods when calculating the current account balance.

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