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Economy

Japan's current account surplus down in 1st half on weak exports

Sales of chipmaking equipment to South Korea plunge amid US-China conflict

The Finance Ministry says in a preliminary report that the nation's trade surplus fell 4.2 percent from a year earlier.   © Reuters

TOKYO (Kyodo) -- Japan's current account surplus decreased from a year earlier in the first half of 2019, hit by sluggish exports to the Asian region amid ongoing trade tensions between the United States and China, government data showed Thursday.

The surplus in the current account, one of the widest gauges of international trade, stood at 10.47 trillion yen ($98.73 billion), down 4.2 percent from a year earlier, according to a preliminary report released by the Finance Ministry.

Among key components, the surplus in goods trade plummeted 87.4 percent to 224.2 billion yen as exports of semiconductor manufacturing equipment to South Korea as well as those of steel and auto parts to China were sharply down in the January-June period.

Although Japan decided in July to review its preferential trade treatment of South Korea, the impact was not reflected in the reporting period, a ministry official said.

Exports fell 5.2 percent from a year earlier to 37.95 trillion yen and imports also decreased 1.4 percent to 37.73 trillion yen.

Meanwhile, primary income, which reflects returns on overseas investments, helped the world's third-largest economy remain in black ink, running a surplus of 10.59 trillion yen, up slightly at 0.2 percent to mark the second-highest result on record.

Services trade, which includes cargo shipping and passenger transportation, registered a surplus for the first time on a half-year basis, coming to 231.6 billion yen, boosted by an increase in the number of foreign travelers to Japan.

In June alone, Japan reported a current account surplus of 1.21 trillion yen, marking the 60th straight month of black ink.

Goods trade had a surplus of 759.3 billion yen, down 7.8 percent from the year before. Services trade ran a surplus of 50.9 billion yen and primary income saw a surplus of 427.3 billion yen.

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