Japan’s Surplus Soars Amid Rising Tension

Japan’s contentious surplus in its current account, the broadest measure of trade in goods and services, rose 77.7% in August from a year earlier to 817.8 billion yen, marking the fifth consecutive monthly increase, the Finance Ministry announced today. The surplus in merchandise trade alone rose 68% from the same month a year earlier to 912.6 billion yen. At today’s rate of about 120 yen to the dollar, the current account surplus amounted to $6.81 billion and the trade surplus was $7.60 billion. August’s sharp rise in the current account surplus was within economists’ forecasts, which ranged from a rise of 72% to one of 98%. The dollar rose slightly against the yen in morning Tokyo trading, with the market reacting minimally to the data. Weak imports caused by a sluggish economic recovery in Japan and strong exports, especially to the U.S., have boosted the current account surplus since the start of the year. The rise is expected to keep the U.S. grumbling about the growing trade imbalance between the two countries. U.S. officials have said that Japan has not taken steps to stimulate its struggling economy and that this is complicating its efforts to reduce its huge trade surplus. “We are already at levels which are worrying the U.S.,” said Richard Jerram, chief economist at ING Baring in Tokyo. “We think the surplus is going to keep going up for about another year.”