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Japan's current account posted a surplus in May but fell short of market expectations. Strong semiconductor exports pushed the trade balance into surplus, while a decline in visitors to Japan tipped the services balance into deficit.
According to Japan's Ministry of Finance on the 8th, the May current account recorded a surplus of 3.9683 trillion yen (about 37.086 trillion won). While it fell short of the market forecast of 4.1105 trillion yen based on Bloomberg estimates, the surplus widened compared with the same month a year earlier (3.4364 trillion yen).
The trade balance's swing to surplus expanded the overall surplus. The May trade balance posted a surplus of 6.9 billion yen, an increase of 504 billion yen from the same month a year earlier. Exports rose 14.7% to 9.3602 trillion yen. In particular, exports of electronic components such as semiconductors jumped 61.2% year-on-year and automobile exports rose 13.7%, driving the increase in exports.
Imports also rose as raw material prices climbed amid conflicts in the Middle East and elsewhere. Japan's May imports came to 9.3533 trillion yen, up 8.1% from the same month a year earlier. Japan's exports have risen for nine consecutive months and imports for four consecutive months.
However, as the number of travelers visiting Japan declined, the travel balance surplus shrank, tipping the services balance into deficit. This is unusual given the strong yen weakness, with the average dollar-yen exchange rate in May recorded at 158.34 yen. The number of foreign visitors to Japan fell 3.6%, while the number of Japanese departing overseas rose 4.7%.
After the announcement, the dollar-yen exchange rate showed a limited impact, rising 0.30 yen from the previous day's close to as high as 162.40 yen.
