In March 2009, Japan's current-account surplus declined 48.8 per cent to 1,485.6 billion yen (15.3 billion US dollars) for the 13th consecutive month, against a surplus of 2,902.4 billion yen in March 2008, the country's finance ministry said.
In the full fiscal 2008 the country's current account surplus declined 50.2 per cent of the previous fiscal, as the global slowdown having hurt its exports, Japan's finance ministry disclosed today.
In the fiscal year ending March 2008, its current account surplus stood at 12,229.1 billion yen ($126.07 billion).
Till 2007, Japan had a record surplus in its current account for five years in a row.
Japan's surplus in trade in goods dropped 89.3 per cent to 132.9 billion yen, with exports falling 46.5 per cent against a decline of 37.8 per cent in imports in March
Exports dropped at a record pace of 16.3 per cent to 67,724.9 billion yen (698.19 billion dollars) while imports fell by 3.9 per cent to 66,554.5 billion yen (686.12 billion dollars), year-on-year in fiscal 2008, according to the report.
The current account balance is the broadest gauge of trade in goods, services, tourism and investment and is calculated by determining the difference between a nation's income from foreign sources and payments on foreign obligations, excluding net capital invest which is maintained by the finance ministry. It also includes trade not shown in the customs-cleared trade balance.
Japan had registered a current account deficit of 172.8 billion yen ($1.8 billion) in January for the first time in 13 years. (See: Japan reports current account deficit of $1.8 billion in January)
Japan registered a trade deficit of 725.3 billion yen ($7.3 billion) for the financial year ended 31 March 2009 (April 2008-March 2009) - the first yearly trade deficit since 1980 - as exports plummeted with the global economic downturn. (See: Japan registers its first trade deficit in 28 years)
In April, the annual World Economic Outlook report, IMF stated that the Japanese economy is projected to contract by over six per cent in 2009 since the yen's strength and tighter credit conditions have added to the problems of the export sector. Mild deflation is expected to persist at least through 2010.
The Japanese government said it expects the country's economy to shrink by 3.3 per cent during the current fiscal year while presenting a supplementary budget of ¥15.4 trillion ($155 billion), the largest ever government spending to finance a new stimulus package.
With the fresh stimuli, the cabinet office expects the economic to grow by 2 per cent by the end of in the current fiscal year – March 2010. (See: Japan unveils supplementary budget of ¥15.4 trillion)
According to IMF, Japan's debt is likely to increase to 197 per cent of gross domestic product for current year. (See: Japan's deficit at precarious level: IMF)
Although sales to the US have declined, companies like Nissan have reported growth in sales to China. All the three major automakers of Japan have reported losses as export have tumbled down. (See: Nissan reports ¥233.7 billion loss for FY09, projects net loss of ¥170 billion for FY2010)