Japan's current account surplus down 19.4 percent

[September 08, 2009]  TOKYO (AP) -- Japan's current account surplus in July fell 19.4 percent from a year earlier as exports tumbled amid a slow recovery in the global economy, the finance ministry said Tuesday.

The current account surplus, Japan's broadest measure of trade with the rest of the world, was 1.27 trillion yen ($13.6 billion), the first year-on-year fall in two months, the ministry said.

Exports in July dropped 37.6 percent to 4.55 trillion yen, marking the 10th consecutive year-on-year decline.

"Sluggish exports dragged down the surplus. Exports were weak in every key region, underlining that a recovery in the global economy has yet to become solid," said Hideki Matsumura, senior economist at think tank Japan Research Institute.

Japan's exports to the United States dropped 39.5 percent, while Asia-bound shipments fell 29.9 percent. Exports to the European Union nose-dived 45.8 percent in the month.

Matsumura said exports, a key driver for Japan's economy, will remain stagnant throughout the year due to sustained concern over a recovery in the U.S. economy.

"Unless the U.S. economy fully recovers, we will not see a turnaround in exports," he said.

Among key products, auto exports were down by a staggering 52.3 percent. Steel exports also plunged 42.1 percent. Exports of semiconductor products fell 28.0 percent.

Imports plunged 41.2 percent to 4.11 trillion yen in the month.

Along with falling exports, the finance ministry said a drop in the income surplus, which includes revenue of Japanese companies operating overseas, pressured the current account surplus.

The income surplus plunged 24.2 percent from a year earlier to 1.25 trillion yen.

"Revenue of Japanese subsidiaries abroad fell amid a slumping global economy," a ministry official said.

[Associated Press]

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