Japan last year logged its biggest annual current-account surplus since the 2008 financial crisis, figures showed on Wednesday, as the country’s prime minister prepares to meet protectionist-leaning Donald Trump. The new president has assailed Japan for allegedly devaluing the yen to boost exports, grouping it with other countries he says are taking “advantage” of the United States.
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The surplus in the current account-the broadest measure of Japan’s trade with the rest of the world — comes at a tricky time for Shinzo Abe, who heads to Washington this week. “I think Japan having a sizeable current-account surplus is definitely a political liability now,” Takuji Okubo, chief economist and principal at Japan Macro Advisors, told Bloomberg News.
“It basically gives ammunition to the Trump administration that the yen is too cheap.” Japan’s current account surplus hit 20.65 trillion yen ($184 billion) last year, the highest level since a record surplus of 25 trillion yen in 2007, the finance ministry said. The indicator includes trade both in goods and services as well as tourism and returns on foreign investment.
Data released by the US Commerce Department on Tuesday showed the United States ran its second largest trade deficit with Japan, after China. Japan’s top government spokesman Yoshihide Suga on Wednesday commented on the issue, saying the allies’ economics relations were “maturing”, and noted the country was a major US job creator. The comments come after Trump slammed car giant Toyota over a planned vehicle factory in Mexico.
Japan’s 2016 current account figure grew 26 per cent from 2015 as it posted the first annual surplus in goods and services trade since the 2011 Fukushima nuclear disaster sent the country’s energy import bills soaring. Energy prices have since fallen while record tourism has boosted the services sector. Financial income, including Japanese firms’ buyouts abroad and investment in bonds and other securities, also rose by more than one third from the previous year.
Japan publishes fourth-quarter gross domestic product figures on Monday. The world’s third largest economy will have kept its growth pace and expanded 0.3 per cent in the three months to December, according a median forecast of economists surveyed by Bloomberg News.