Japan Posts Trade Surplus; South Korean Exports Up

Tokyo. Japan’s current account surplus grew 10.4 percent in August from a year earlier as exports fell at a slower pace than imports, data showed on Thursday.

The surplus in the current account — the broadest measure of trade with the rest of the world — rose to 1.17 trillion yen ($13.3 billion) in the month, the Finance Ministry said.

Meanwhile, in South Korea, exports and consumer spending grew further in September, raising expectations that the central bank will lift interest rates soon, though it probably will hold fire at its monthly review today.

Japan, the world’s second-largest economy, logged a trade surplus of 303.7 billion yen, reversing a year-earlier deficit of 141.2 billion yen, data showed. Exports were down 37.1 percent to 4.23 trillion yen, while imports fell by a steeper 42.8 percent to 3.92 trillion yen.

The deficit in the services account widened to 122.8 billion yen from 115.9 billion yen due to higher deficits in the transport sector, the ministry said.

The surplus in the income account shrank 24.5 percent to 1.06 trillion yen, due to falling returns on overseas investments.

Historically, Japan has had a large surplus in its current account, which measures the flow of goods, services and investment income. But the global recession has hit demand for key vehicle and high-tech exports.

Domestic demand remains weak and a stronger yen is hurting exporters, raising concerns that the recovery could stall as the impact of the government’s pump-priming measures fades.

Analysts in South Korea said the rise in house prices — a major concern for the central bank — continued in September and the decline in mortgage lending was likely to prove temporary.

A report by South Korea’s top lender showed this week that housing prices rose for the sixth month in a row in September. Thursday’s data indicated that Asia’s fourth-largest economy was picking up. Exports from South Korea to China rose 4 percent in September from a year ago, the first annual rise in a year.

Government data showed department store sales and credit card usage in September hit multimonth highs, a sign that consumer demand was picking up.

The central bank has repeatedly said that despite still benign inflation, it may have to raise rates from record lows to stave off a rapid rise in household debt and a potential housing bubble.

Such warnings convinced investors that a rate rise was in the cards. Analysts bet the central bank would flag tightening ahead and confidence that rates would go up by year-end was seen in markets, with treasury bond futures down 0.2 points and the won a touch stronger.

Agence France-Presse, Reuters

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