TOKYO (AFX) - The Ministry of Finance said the current account surplus contracted for the fifth consecutive month in April, on a year-on-year basis, due to a decline in the size of the trade surplus. The trade surplus fell on a distinct rise in the value of imports and drop in export values, led by autos, as well as semiconductors and other electrical parts, an official said.
The current account surplus narrowed to 877.6 bln yen from 1.16 trln a year earlier, while the trade surplus fell to 837.2 bln from 1.29 trln, the tenth consecutive monthly contraction.
"In April, the declining trend in the volume of exports became clearer, reflecting weak demand for autos and information-technology related semiconductors and electrical parts," the official said. "We cannot predict whether the weak exports will continue because it is unclear if the U.S. economy will recover soon and because the foreign exchange situation will affect the export data," he said. The official added that the deficit in the services account -- of 640.9 bln yen compared with a deficit of 520.6 bln the year before -- was caused by seasonal factors.
"April is the start of the new fiscal account year so foreign affiliated firms in Japan send a huge amount of royalties to their parents," he said.
The value of exports dropped 1.1 pct year-on-year as auto exports to the European Union fell 20.9 pct and 7.1 pct to the U.S. Electrical parts exports to the EU fell 21.8 pct and 17.3 pct to the U.S.
The value of imports rose 13.3 pct, led by a sharp rise of 14.2 pct in the cost of oil imports, mainly due to yen weakness. In April, the value of the yen fell 17.4 pct year-on-year against the dollar.