/www.bloomberg.com/ By Daisuke Takato
Tokyo, Oct. 10 (Bloomberg) -- Japan's current account surplus shrank to 1.16 trillion yen ($9.4 billion) in August as exports fell, a sign that the world's second-largest economy may be slowing.
The surplus, the broadest measure of trade because it includes investment and services, fell 8.3 percent from July, seasonally adjusted, Ministry of Finance figures showed. Economists had expected the surplus to widen to 1.32 trillion yen after narrowing to 1.26 trillion yen in July.
Exports, the main driver of Japan's 0.6 percent growth in the second quarter, are slumping as the U.S. economy slows and the yen's 6.6 percent gain against the dollar this year erodes the value of shipments from companies such as video-game maker Nintendo Co.
``Given the weak outlook on demand from the U.S. and other countries, exports are not likely to have another rebound soon,'' said Takeshi Minami, a senior economist at UFJ Capital Market Securities.
The yen pared gains after the report. It was at 123.50 to the dollar at 12:01 p.m. in Tokyo, compared with 123.19 before the report and 123.28 late yesterday in New York.
Nintendo, the world's second-largest video-game maker, cut its full-year profit forecast 11 percent this month because of falling overseas sales and the strong yen. The Kyoto-based company, which sells more than half its goods in the U.S., Canada and Latin America, said group net income would probably be 80 billion yen in the fiscal year ending March.
Exports fell a seasonally adjusted 2.9 percent in August, the third decline, on a balance of payments basis, today's report showed.
Japan's overseas shipments are being dented by the slowdown in the U.S., which buys two-fifths of its exports. Economic growth in the U.S. slowed to an annual pace of 1.3 percent in the second quarter from 5 percent in the first.
Shrinking Surplus
Imports rose 1.8 percent in August from July, today's report showed. Imports may rise further, narrowing the trade surplus, as companies such as Honda Motor Co. shift factories abroad to cut costs. Those companies then ship goods back to consumers in Japan, boosting the nation's imports.
``There's a structural shift in production as companies are re-importing goods, and that will sustain the level of imports,'' said Shuji Shirota, an economist at Dresdner Kleinwort Wasserstein. ``The trade surplus may shrink and the recovery could end as early as this year or the beginning of next year.''
Honda, the world's largest motorcycle maker, started selling its Chinese-built Today scooter in Japan in August. Honda plans to sell about 100,000 units a year of the scooter at 94,800 yen, the first time in 15 years the company has offered a scooter priced at less than 100,000 yen.
Japan's income account surplus, which tracks profits, dividends and interest payments, fell to 715.1 billion yen from 791.8 billion yen in July.
The services deficit, which includes overseas travel, rose to 340.3 billion yen from 444.6 billion yen deficit in July.
From a year earlier, the current account surplus widened 49 percent to 1.08 trillion yen. Economists had expected a 1.15 trillion yen surplus.