Japan current account surplus falls to its lowest since 1996, Reuters says

TOKYO (TR) – Japan’s current-account surplus fell 44 percent in 2011 from the previous year to $125 billion (9.63 trillion yen); that is its lowest since 1996 and its biggest fall on record, Reuters reported.

Japan posted its first trade deficit since 1980 last year after suffering the devastating March 11 earthquake and tsunami, which paralyzed most of the nation’s nuclear energy output and greatly increased the cost of energy. Additionally, the slowing global economy and Eurozone debt crisis are driving up the value of the yen as traders seek safety, further raising the cost of the nation’s exports.

The surplus in returns from overseas investments has mitigated some of the declines stemming from Japan’s export-driven economy, according to Reuters. Earnings from overseas assets rose nearly 20% to $182 billion (14.03 trillion yen).

Analysts also worry that further declines in Japan’s current account could threaten the government’s ability to finance its large deficit, which stands at nearly twice the size of the nation’s $5 trillion economy, Reuters said.

The current account is the broadest measure of trade with the rest of the world.

Source: Reuters

Posted by Michael Blaskoski on February 8, 2012. Filed under National,Uncategorized. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.