TOKYO: Japan's current account surplus shrank 47.6 percent from a year earlier in January as the trade balance fell into its first deficit in two years, the finance ministry said on Tuesday. While the fall in the current account surplus was expected, some economists noted concerns over rising crude oil prices and the longer-term impact that this could have on the current account balance by pushing up import costs. The surplus in the current account, the broadest measure of trade with the rest of the world, stood at 461.9 billion yen ($5.6 billion dollars) in the month. The result compared with a median forecast of a 43.3 percent fall in the surplus to 500 billion yen in a survey of economists by Dow Jones Newswires and the Nikkei. In December the surplus was up 30.5 percent at 1.195 trillion yen. Exports in January rose a modest 2.9 percent because of weak demand in Asia ahead of China's Lunar New Year holiday. Imports expanded 15.6 percent as Japan bought more crude oil and iron ore, resulting in the first deficit in trade balance since January 2009, the official data said. But economists said the deficit was a short-term issue.
"It was mainly weighed by China's Lunar New Year holidays," HSBC Securities Chief Economist Seiji Shiraishi told Dow Jones Newswires.
"I expect the economy to remain on course to exit its recent lull, so exports should remain healthy as well going forward," he said.
Separate data released Tuesday by the Bank of Japan showed bank lending continued to drop in February for the 15th straight month, a sign that many firms remain cautious about the economic outlook. The wave of social unrest sweeping the Middle East and North Africa has seen oil prices surge, prompting worries that the higher cost of oil will depress a global economic recovery.
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