Japan returns to surplus as exports surge

 
Tim Wallace
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STRONG demand from a resurgent US boosted Japan’s economy in February, official data showed yesterday.

The country’s current account balance swung back into surplus as exports jumped and gains from overseas investments reversed the record deficit registered in February.

The surplus came in at ¥1.78 trillion (£13.7bn) according to finance ministry data – the strongest surplus in five months and well up on the ¥437.3bn deficit in January.

That remains 30.7 per cent smaller than the surplus recorded a year earlier, in part reflecting the slowdown in Asia and Europe which continues to pose a risk to the economy.

“We could still see some trade deficits in the future,” said Hiroaki Muto, senior economist at Sumitomo Mitsui Asset Management.

“However, they will shrink as exports recover due to a pickup in the global economy, led by improvement in the outlook for the US economy.”

Meanwhile the economy watchers’ survey rose to an eight-month high, pointing to increased growth as the yen weakened and reconstruction projects continued.