Japan’s current account surplus shrinks

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    TOKYO- Japan posted its smallest current account surplus in more than five years in June, Ministry of Finance data showed on Tuesday, mainly due to a slump in exports, highlighting the heavy hit to external demand from the coronavirus pandemic.

    The current account surplus was 167.5 billion yen ($1.58 billion), the smallest monthly surplus since January 2015, a finance ministry official said.

    That compared with a median forecast for a 110 billion yen surplus and a 1.177 trillion yen surplus in May. The current account balance has maintained a run of uninterrupted monthly surpluses for six years.

    Exports plunged 25.7 percent in June from a year ago, hit hard by falling shipments of cars and car parts to the United States, the data showed. That was slightly smaller than a 28.9 percent annual decline in May.

    Imports shed an annual 14.4 percent, following a 27.7 percent annual fall in May. As a result, the trade deficit in June widened to 157.7 billion yen.

    A 99.9 percent drop in foreign tourists due to immigration restrictions imposed over the health crisis sent the travel account to a 157.7 billion yen deficit in June, the data showed.

    Weakening overseas demand has raised worries of a prolonged downturn for the world’s third-largest economy, with some analysts seeing the impact from the COVID-19 crisis on corporate and household sentiment lasting into next year.