Japan's April current account surplus down 54.5 per cent

Japan's current-account surplus narrowed more than economists expected in April to 54.5 per cent to 630.5 billion yen ($6.38 billion) in April from a year earlier, according to a preliminary Japan's ministry of finance report data released today, indicating a moderation in  the rate of decline of its exports.

Japan's current-account surplus shrank 48.8 per cent for a third consecutive month in March 2009 (See: Japan's current account surplus down 48.8 per cent in March YoY) having plunged a record 55.6 per cent in February from a year earlier (See: Japan's current account surplus plunged 55.6 per cent in February).

Exports fell 40.6 per cent to 3,915.1 billion yen from 6,594.8 billion yen a year earlier, as exports of its main products like cars, electronics and other goods remained sluggish while imports were down 37.8 per cent to 3,730.8 billion yen.

Exports declined 46.5 per cent in March and a record 50.4 per cent in February while imports remained at the same level as March.

The balance of trade in goods and services fell into the red for the first time in three months to record a deficit of 287.3 billion yen from 205.3billion yen a year earlier.

The surplus in merchandise trade fell 69.2 per cent to 184.3 billion yen from 598.5 billion yen a year earlier.

According to the ministry, services recorded a deficit of 19.96 per cent to 471.7 billion yen from 393.2 billion yen a year earlier, the biggest since April 2007 indicating tourism has also taken a hit.

The income surplus contracted 18.5 percent to 1.06 trillion yen in April from 1.29 trillion yen a year earlier. The difference between money earned overseas and payments made to foreign investors in Japan accounts for income.

The current-account surplus on a seasonally adjusted basis and expanded 7.1 per cent to 966.3 billion yen from March.

The global financial crisis caused the collapse of export for an export driven country like Japan causing it to post its first current-account deficit in 13 years in January.

IMF has predicted that the Japanese economy is projected to contract by over six per cent in 2009, while the world trade business is expected to contract by a massive 11 per cent this year with a recovery of mere 0.6 per cent in 2010.