By Tetsushi Kajimoto
TOKYO (Reuters) – Japan’s current account surplus grew for the 15th straight month in May as a record primary income surplus more than offset the trade deficit, the Ministry of Finance said on Monday, reflecting an ongoing shift of the country’s sources of earnings.
The current account grew to 2.85 trillion yen ($17.74 billion) in May, compared with a median forecast from economists for a surplus of 2.45 trillion yen and the prior month’s 2.05 trillion yen surplus.
Return from securities investment overseas, including interest payments due to elevated long-term rates and dividends, were boosted by the weak yen, a ministry official said.
By category, the trade balance turned into a deficit of 1.1 trillion yen, a second straight month of shortfall, with exports logging 8.13 trillion yen, up 12.1% from a year earlier, and imports rising 9.3% from May last year.
That left the current account with surplus of 2.85 trillion yen.
The country’s current account surplus was once considered a sign of export might and a source of confidence in the safe-haven yen.
However, the account has occasionally fallen into deficit on a monthly basis in recent years, while primary income gains have taken over exports as the main driver of boosting the current account surplus.
The primary income surplus, which includes interest payments and dividends from past investments overseas, hit 4.2 trillion yen, the largest since comparable data became available in 1985.
For the fiscal year 2023 that ended in March this year, Japan’s current account balance – which measures transactions of goods and services with overseas parties – was in a surplus of a record 25 trillion yen.
However, some analysts estimate the country’s current account surplus may be on a declining trend in the medium to long term if deficits in the trade of goods and services persist.
($1 = 160.6100 yen)
(Reporting by Tetsushi Kajimoto; Editing by Christopher Cushing)
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