By Tetsushi Kajimoto

TOKYO, Reuters – Japan’s current balance surplus fell sharply in April due to record imports outweighing exports. This flipped the trade balance into red data on Wednesday. It raises concerns over Japan’s long-term purchasing ability.

According to data, Japan’s current account surplus was at 501 trillion yen ($3.77 Billion) in April. That is down 628 million yen from the month last year.

The surplus was for the third month straight and it is broadly consistent with an economists median forecast that there would be a surplus of 511 trillion yen, according to a Reuters poll.

Rising fuel costs led to an increase in overall imports of 32.8% annually, a record number. This was more than the export growth driven by steel and car shipment shipments.

Current account data clearly shows the changes in Japan’s economy. Japan has a lot of income from portfolio investments and overseas direct investment, which are now the main drivers of current account gains.

Some analysts worry that Japan’s current accounts surplus will continue shrinking, even though it is supported by substantial returns on overseas investment.

Since March 2022, the current account surplus has fallen for four consecutive fiscal years.

While a weak yen caused import prices to rise, it did not have the same impact on exports as before. This was because of an ongoing shift in production by exporters abroad.

($1 = 132.7800 yen)