Japan Current-Account Surplus Narrows 66% on Exports
Japan's current-account surplus narrowed for a ninth month in November as exports slumped in the wake of the global recession, Bloomberg reported.
The surplus shrank 65.9 percent to 581.2 billion yen ($65 billion) from a year earlier, the Ministry of Finance said in Tokyo today. The median estimate of 24 economists surveyed by Bloomberg News was for the gap to narrow to 600 billion yen.
Japan's recession is deepening as the worldwide financial crisis chokes off demand for the nation's cars and electronics, prompting companies to cut production and investment. Toyota Motor Corp., which is forecasting its first operating loss in seven decades, said last week that it will suspend manufacturing at a dozen domestic factories for 11 days in February and March.
"Japan's economic downturn may be considerably deep," said Yoshiki Shinke, a senior economist at Dai-Ichi Life Research Institute in Tokyo. "Exports will probably drop further in the coming months, worsening corporate profits and investment."
Exports fell 26.5 percent in November from a year earlier, today's report showed. Imports slid 13.7 percent.
The yen's 20 percent gain against the dollar in the past year is compounding exporters' woes and eroding the value of investments Japanese have overseas. Japan's currency surged to a 13-year high of 87.14 on Dec. 17.
Every 1 yen gain against the dollar and euro trims Toyota's annual operating profit by 40 billion yen and 6 billion yen, according to the company.