Japan posted back-to-back monthly current-account deficits for the first time since 1981, highlighting challenges for Prime Minister Shinzo Abe’s campaign to revive the economy.
The shortfall in the widest measure of the nation’s trade was 264.1 billion yen ($2.8 billion) in December, the Ministry of Finance said in Tokyo today. The median estimate of 23 economists surveyed by Bloomberg News was for a deficit of 144.2 billion yen.
Weakness in global demand, a spat with China and increased energy imports because of nuclear plant shutdowns are weighing on the world’s third-biggest economy as Abe pushes the Bank of Japan to end deflation and spur growth. The yen’s slide against the dollar is offering the prospect of an export revival.
“It will be three-to-six months before we see a substantial pick up in exports,” Takahiro Sekido, a strategist in Tokyo at Bank of Tokyo-Mitsubishi UFJ Ltd. who formerly worked at the Bank of Japan, said before the report. “The current-account position provides another incentive for Abe to continue his campaign.”
The yen has depreciated more than 14 percent since mid- November when the previous government announced an election that brought Abe to power. The currency was 0.1 percent higher at 93.58 per dollar as of 11:08 a.m. in Tokyo. The Nikkei 225 Stock Average was 1.1 percent lower after falling 0.9 percent yesterday. The benchmark was headed for its 13th week of gains.
The last consecutive monthly current-account deficit was in February 1981, according to the ministry. The 2012 annual current surplus of 4.7 trillion yen was the lowest since at least 1985, falling 51 percent from the previous year, the ministry said. The calculation method was changed in 1985, according to the ministry.
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