- Jane Turner, senior ASB economist
Japan logged a current account surplus for the 11th consecutive month in May as lower energy prices narrowed trade deficit and a weak Yen boosted income from overseas investments. The current account surplus came in at 1.88 trillion yen, overshooting a median forecast for a 1.54 trillion yen surplus. May's surplus appeared to be the biggest since 2007, while May was the fourth straight month that Japan posted an over 1 trillion yen surplus. Japan's imports plunged an annual 10.3% in the reported month as oil prices dropped by almost half from the same period last year. At the same time, exports were down by an annual 0.1%, marking the first decrease in 27 months. The current account surplus widened also on the back of an increase of the income balance that surged 38.0% on a yearly basis due to higher earnings on overseas investments. A record number of foreign tourists to Japan also contributed to higher current account surpluses.
The world's third biggest economy is predicted to have slowed in the second quarter as companies use up inventories built up un the preceding three-month period. Nevertheless, there are signs of a rebound in the second half of the year, as the Bank of Japan's data showed big companies plan to boost capital expenditure at the highest rate in a decade.
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