Japan may still be the world's largest creditor nation, but it is likely to starting losing some of its wealth within the next couple of years, as its broadest trade measure lurches closer to its first annual deficit in more than 30 years.
The nation's current account balance, the broadest measure of trade with the rest of the world, posted a second monthly deficit on a seasonally adjusted basis in October of ¥59.3 billion ($576 million), government figures showed Monday. That's the first back-to-back shortfall under the current data series that started in 1996.On a nominal basis, the current account also logged its first deficit since January, its fifth shortfall since the watershed month of March 2011, when the earthquake and tsunami rocked Japan's economy and caused changes to Japan's energy usage through the Fukushima nuclear accident.
Japan has posted a current account surplus every year since 1981, on the back of its strong exports and overseas investment income.
While the monthly figures so far this year suggest the current account will stay in the black in 2013, economists see a trend of regular deficits becoming clearer over the next couple of years.
Part of Japan's current account problems stem from the surge in imports of fossil fuels needed to make up for the loss of nuclear power, after reactors were shut down following the tsunami-triggered Fukushima nuclear accident. Those imports are weighing heavily on the trade balance.
Source: the Wall Street Journal
Japan has posted a current account surplus every year since 1981, on the back of its strong exports and overseas investment income.
While the monthly figures so far this year suggest the current account will stay in the black in 2013, economists see a trend of regular deficits becoming clearer over the next couple of years.
Part of Japan's current account problems stem from the surge in imports of fossil fuels needed to make up for the loss of nuclear power, after reactors were shut down following the tsunami-triggered Fukushima nuclear accident. Those imports are weighing heavily on the trade balance.
Source: the Wall Street Journal
