Tokyo, May 14 (Bloomberg) -- Japan's current account surplus almost halved in March,as slower global growth sapped demand for the country's exports, and as imports rose. The current account surplus shrank to 731.8 billion yen ($6 billion), seasonally adjusted,in March, from 1.25 trillion yen in February, the Ministry of Finance said. Economists hadexpected the to 857.8 billion yen. From a year earlier, the surplus shrank 0.6 percent to1.3 trillion yen, unadjusted. The current account is the broadest measure of the flow of goods, services and money toand from Japan. Economists expect the surplus to fall as economic growth in Asia andthe U.S. -- Japan's biggest export markets -- slows more than domestic demand. ``Compared with exports, imports are still high,'' said Kazuhiko Ogata, a senioreconomist at HSBC Securities (Japan) Ltd. ``Even though Japan's economy is going intoa recession, some special factors -- such as Japanese companies shifting theirproduction sites overseas -- is causing imports not to fall as much.'' According to today's report, the trade surplus narrowed 44 percent in March fromFebruary to 634.6 billion yen. Exports fell 2.8 percent and imports rose 12 percent. Froma year ago, exports rose 3.1 percent and imports gained 9.8 percent. A ministry report released last month showed the volume of goods shipped overseas fellfor the third straight month on falling demand in the three major trading regions -- Asia,the U.S. and the European Union.
Economy Worsening
Manufacturers at home are responding by cutting production, leading to the recentdowngrades in the government and central bank's economic assessments. Thegovernment on Friday said the economy is ``increasingly weakening,'' the fourth straightmonth it has lowered its assessment of the economy. Japan's forward-looking indicators are showing the economy may get worse this year.The main index of leading economic indicators fell short of 50 percent for the third straightmonth in March, suggesting the economy may contract, according to Economic andSocial Research Institute figures. The income account surplus, which tracks the flow of dividends and interest payments inand out of Japan, narrowed to 560.3 billion yen. The current transfers deficit widened to59.2 billion yen. The services account deficit, which tracks spending on things such as travel andintellectual property rights, stood at 403.9 billion yen in March, from 412.2 billion yen inFebruary. Crude oil averaged $26.06 a barrel, down 2.9 percent from a year earlier, according to theministry. In yen, oil cost 19,362 yen per kiloliter, up 5.9 percent from a year ago. Oilprices in yen terms have been rising for almost two years. The yen averaged 121.12 to the dollar in March, down 13.5 percent from year ago, thefinance ministry said. It was recently at 122.66 to the dollar.