Japan's August current account surplus drops 64.3%

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Japan's current account surplus fell 64.3 percent in August from a year earlier, the Ministry of Finance said in a report on Tuesday.

According to the ministry's data, the current account surplus fell to 407.5 billion yen (5.31 billion U.S. dollars) in the recording period, marking the sixth straight month of decline and falling short of median market forecasts.

Higher energy prices and a stronger yen against other major currencies negated a rise in exports following recovering supply chains after the March earthquake and tsunami, the government report indicated.

Exports were seen to rise 4.0 percent in August from a year earlier, marking the first rise year-on-year in six months, following a 2.3 percent retraction in July, the MOF said. Imports, on the other hand, leapt 22.4 percent in the recording period, having risen 13.6 percent a month earlier, the data showed.

The trade deficit stood at 694.7 billion yen, in line with consensus forecasts, while the combined goods and services accounts were in deficit by 877.3 billion yen in August, compared with a surplus of 93.7 billion yen logged during the same period a year earlier.

Japan's current account balance is one of two major gauges of its foreign trade and a current account surplus increases the nation's net foreign assets by the corresponding amount and a current account deficit does the opposite.

The balance of trade is the difference between Japan's exports of goods and services and its imports. A trade deficit occurs if Japan is importing more than it exports.