Photo by Government of Japan

JAKARTA (TheInsiderStories) – Japan’s current account surplus rose 4.2 percent year on year (y/y) to JPY3.1 trillion (US$285 billion) on a non-seasonally adjusted basis in March. The surplus jumped 84.0 percent from the previous month to JPY1.8 trillion on a seasonally adjusted basis, thanks largely to the end of disruption caused by Japan’s trade partners’ Lunar New Year holidays.

The year-on-year increase largely reflected a 37.6 percent (or JPY325 billion) rise in the trade surplus on a non-seasonally adjusted basis. Exports rose 3.7 percent y/y, thanks to strengthened export growth to Asia, while imports declined 0.9 percent y/y — the first contraction since December 2016.

The service balance surplus narrowed by 15.3 percent y/y to JPY193 billion due to a narrower surplus from other services such as construction, finance and insurance, and information services. Although primary income remained the major source of the current account surplus, weaker income from direct investment softened the surplus by 6.0 percent y/y to JPY2.1 trillion.

Taguchi assessed the improving global economic outlook is likely to help Japan’s exports, softer upward momentum in global demand and higher oil prices will probably weigh on Japan’s trade balance over the near term. The expansion of the U.S protectionism and trade friction with China are great concerns for Japan’s trade and could narrow Japan’s current surplus.

That said, Japan’s current surplus is likely to continue over the near term, given that recent correction to the yen’s appreciation is likely to contribute to tourism and income from foreign currency assets. An uptrend in large-scale mergers and acquisitions of overseas companies by Japanese companies will also support primary income over the medium term.

Email: linda.silaen@theinsiderstories.com

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The Insider Stories Founder Linda Silaen has a solid, proven history, established over more than a decade as a journalist with a leading internasional news organization, of being the first with the biggest economic news stories in Indonesia. Specializing in corporate news, Linda is also a veteran of some of the biggest macroeconomic and general news stories as Indonesia rapidly transforms into a major market economy. One of the founders of the original blog from which this company developed, Linda’s knowledge of investors’ information communications and data us developed from unrivaled networking skills that make her a well-known name among CEOs, bankers, government officials and private equity investors both in Indonesia and other countries.

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