Tokyo, May 15:

Japan said that its current account surplus swelled to a record high in the fiscal year to March, marking a fourth straight annual rise as strong exports offset soaring oil import costs. The surplus in the current account, the broadest measure of trade in goods and services, rose 3.9 per cent to an all-time high 18.92 trillion yen (172.5 billion dollars), the finance ministry said.

The data highlighted growing global economic imbalances that are weighing heavily on the dollar, with Asian economies such as Japan and China enjoying large trade surpluses while the US trade and current account deficits soar.

With oil prices up sharply, however, Japan’s trade surplus alone shrank 27.1 per cent to 9.59 trillion yen for the year, the first decline in four years. The value of imports rose 21.7 per cent to 55.59 trillion yen while exports were up 10.8 per cent to 65.18 trillion yen.

Historically, Japan has run a large surplus in the current account, which measures the flow of goods, services and investment income from overseas.

Recently, however, high oil prices have been inflating the value of imports into Japan which has to buy most of its energy supply from the Middle East. Imports of crude oil for the year rose 57 per cent in value from a year earlier and liquid natural gas by 25.3 per cent, the ministry said, adding that the average crude oil price rose 43.9 per cent to 55.8 dollars per barrel. For March alone, the current account surplus jumped 32.8 per cent year-on-year to 2.40 trillion yen, rising for a second straight month and beating market expectations for a surplus of about 2.05 trillion yen.

The trade surplus alone fell 6.0 per cent in March to 1.11 trillion yen, with imports up 24.8 per cent to 5.41 trillion while exports rose 18.2 per cent to 6.51 trillion yen. The trade balance is likely to remain unstable because of fluctuating crude oil prices, economists said, while expressing optimism for the economy going forward.

“The data showed the solid nature of domestic demand as well as a stable recovery in exports in line with the steady upturn in demand from China, the United States and Europe,” said NLI Research Institute senior economist Taro Saito.