Japan’s current account surplus plunged 55.6 per cent in February

Japan's current account surplus plunged 55.6 per cent in February to 1,116.9 billion yen ( $11.69 billion) from February 2008, due to a sharp decline in exports and returns on foreign investment.

The current account bounced back to a 1.12 trillion yen ($11.2 billion) surplus in February, after registering a 172.8 billion yen ($1.8 billion) deficit in January for the first time in 13 years, Japanese government data released today showed (See: Japan reports current account deficit of $1.8 billion in January)

Japan's exports dropped 50.4 per cent to 3.31 trillion yen from a year earlier, as exports plunged with the global economic downturn, while imports slowed down 44.9 per cent to 3.11 trillion yen, resulting in a trade surplus plummeting 80.4 per cent to 202.1 billion yen for the month.

The ministry has also released the revised current account figures for October-December period to 1.77 trillion yen, a fall of 68 per cent year-on-year.

The surplus in the income account dropped to 34.1 per cent to 1,104.5 billion yen as returns declined from portfolio investment as well as from direct investment such as building factories and acquiring companies.

For Japan, the world's second largest economy, which is heavily reliant on exports, had so far managed a large surplus in its current account due to its booming exports of cars, electronics and other goods, but from January it recorded its first current account deficit since 1996. (See: Japan heading for worst recession since WW II: S&P)