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Japan’s current account surplus widens on large investment gains -Breaking

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© Reuters. FILEPHOTO: This illustration shot taken on June 1, 2017 shows a Japan yen note. REUTERS/Thomas White/Illustration

By Tetsushi Kajimoto

TOKYO, Reuters – Japan’s current accounts surplus widened during March according to finance ministry data. This eased concerns over a shrinking balance of payments as substantial gains in investment incomes outweighed surging fuel prices.

The current account surplus of Japan was 2.55 trillion Japanese yen (roughly 19.68 billion dollars) in March. This is an increase of 69 billion yen, and marks the first annual gain since July. In a Reuters poll, economists had a median estimate of a surplus at 1.75 trillion yen.

On Thursday, data revealed that the oil prices rose despite gains in investment income. However, there are still uncertainties due to the Ukraine crisis as well COVID-19 pandemic.

Data from the current account showed that Japan’s economy is dependent on imports for its raw material needs. The yen has fallen, causing the trade deficit to rise.

This data also shows the changes in Japan’s economy as it earns substantial returns from past investments in overseas securities and direct investment. These have taken over trade in Japan as its main source of current account surplus.

Japan had a total current account surplus in fiscal 2021 of 12.6 trillion Japanese yen. This was down by 3.6 trillion from the prior year. However, the deficit on the trade balance grew due to higher fuel prices.

While a weakening yen did help inflate the import cost, it didn’t have as much impact on export volumes as once. This was because of an ongoing shift by foreign exporters of their production.

($1 = 129.5900 yen)

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