Japan's April current account surplus doubles from year before

Japan's current account surplus for April doubled from a year before, marking the third consecutive monthly gain, as an increase in direct investment income outweighed a trade deficit, government data showed Monday.

The surplus in the balance, one of the widest gauges of international trade, stood at 750.0 billion yen, up 376.5 billion yen from a year earlier, the Finance Ministry said in a preliminary report.

The income account, which reflects how much Japan earns from its foreign investments, marked a record high monthly surplus of 2.12 trillion yen, up 51.8 percent, helped by a rise in dividends and profits Japanese firms gained from their overseas units.

A weaker yen generally boosts the value of Japanese investors' overseas investment gains in yen terms. The Japanese currency has significantly weakened against other currencies, particularly under the aggressive monetary easing policy pursued by the government of Prime Minister Shinzo Abe.

The goods trade deficit expanded for the eighth straight month to 818.8 billion yen, the highest level for April since 1985 as growing imports more than offset a rise in exports.

Imports climbed 9.0 percent to 6,387.1 billion yen, as demand for mineral fuels continued to increase, while an increase in exports of automobiles and plastic ingredients helped push up overall exports 2.7 percent to 5,568.3 billion yen.

The weaker yen has pushed up import costs at a time when utilities need more natural gas and oil for fossil fuel-based power generation after suspensions of nuclear power plants in Japan, following the nuclear crisis at the Fukushima Daiichi complex, crippled by the 2011 quake-tsunami disaster.

The services, covering passenger transportation and cargo shipping, marked a deficit of 440.5 billion yen, although the deficit shrank by 43.8 billion yen from a year before.

The number of foreign travelers to Japan increased 18.1 percent to 923,000, while the figures of Japanese traveling overseas declined 12.3 percent to 1.24 million.

Looking ahead, Ayumi Maekawa, senior economist at the Mizuho Research Institute, said the surge in the dividends and profits of Japanese firms' overseas branches could be restricted to April and fall back in the following months to levels seen in the previous year.

"While the yen's depreciation may push up exports, (other trade) data for May shows that imports are increasing...so if the May trade deficit grows and the income account returns to where it was (the previous year), the current account balance could possibly swing back to a deficit," she said.

A Finance Ministry official said the government will continue to "monitor developments in economic conditions both at home and abroad, foreign exchange rates and prices of liquid natural gas and oil," as they are the factors that would alter the account surplus.