Japan's current account surplus in fiscal 2021 shrank 22.3 percent to 12.64 trillion yen ($97.6 billion) as surging energy prices caused the trade balance of the resource-poor country to deteriorate, the Finance Ministry said Thursday.
The current account balance, one of the widest gauges of international trade, declined for the fourth consecutive year to its lowest level since fiscal 2014, as Russia's aggression against Ukraine pushed up oil and gas prices, according to a preliminary report released by the ministry.
The pace of the contraction was the quickest since fiscal 2013, when the current account surplus decreased 43.7 percent on year as fossil fuel imports climbed due to a suspension of nuclear power plants following the crisis at the Fukushima Daiichi complex in 2011.
Japan's current account surplus, which indicates the nation's international competitiveness, has nearly halved since peaking at 24.34 trillion yen in fiscal 2007.
Imports jumped 35.0 percent in value terms to a record 87.15 trillion yen as purchases of crude oil and coal doubled while those of liquefied natural gas expanded 58.8 percent, the data showed. The global economic recovery from the coronavirus pandemic fallout also contributed to the spike in energy prices.
Japan's import costs were further inflated by the recent rapid depreciation of the yen against the U.S. dollar, a ministry official said. The U.S. dollar averaged 112.38 yen in fiscal 2021, up 5.9 percent from the previous year.
Exports grew 25.1 percent to a record 85.50 trillion yen, lifted by a 33.9 percent increase in semiconductor-manufacturing equipment shipments that reflected booming global chip demand.
The nation's trade balance posted a 1.65 trillion yen deficit in the year that ended March, following a 3.78 trillion yen surplus in fiscal 2020.
Service trade, which includes cargo shipping and passenger transportation, registered a 4.80 trillion yen deficit.
The red ink grew from a 3.54 trillion yen deficit a year earlier as Japanese companies paid more to purchase software and cloud services from foreign companies to promote teleworking amid the pandemic, the official said.
The travel balance, which reflects money spent by foreign visitors in the country on services and goods against the amount Japanese spent abroad, posted a 191.4 billion yen surplus, following a 255.9 billion yen surplus the previous year. In the pre-pandemic fiscal 2019, Japan saw a surplus of 2.46 trillion yen.
In March alone, Japan logged a current account surplus of 2.55 trillion yen, marking the second consecutive month of black ink, helped by an expansion in primary income, which reflects returns on overseas investments.
Primary income in the month increased 1.40 trillion yen from a year earlier to register a surplus of 3.26 trillion yen, lifted partly by the weaker yen boosting dividends from overseas companies.
The country saw a goods trade deficit of 166.1 billion yen in March, down 1.16 trillion yen from a year earlier and marking the fifth straight month of red ink, due to the energy price rises.
Services trade fell 103.0 billion yen to post a 127.7 billion yen deficit as Japanese companies including drugmakers paid more to overseas companies.