UPDATE 2-Japan Feb current account balance swings back to surplus

* Feb current account surplus falls 30.7 pct yr/yr
    * Feb surplus follows record deficit in January
    * Analysts expect current account to stay in surplus


    By Rie Ishiguro	
    TOKYO, April 9 (Reuters) - Japan's current account balance
swung back to a surplus in February after marking a record
deficit the previous month, as improvement in exports added to
steady income gains from overseas investments.	
    While recovery in exports is likely to be slow, analysts
expect Japan's current account balance to stay comfortably in
surplus on steady income gains from past overseas investments,
easing worries that the country may soon need to rely on
overseas funds to finance its huge debt pile.	
    "We could still see some trade deficits in the future, but
they will shrink as exports recover due to a pickup in the
global economy, led by improvement in the outlook for the U.S.
economy," said Hiroaki Muto, senior economist at Sumitomo Mitsui
Asset Management in Tokyo.	
    "In addition, Japan still has a healthy surplus in the
income balance, so the current account balance can avoid
swinging to a deficit."	
    Japan logged a current account surplus of 1.1778 trillion
yen ($14.30 billion) in February, finance ministry data showed
on Monday, more than a median forecast for 1.1485 trillion yen,
after posting a record deficit of 437.3 billion yen in January.
It was the highest surplus in five months.	
    But the February surplus was down 30.7 percent from a year
earlier, smaller than the median forecast of a 32.5 pct fall in
a Reuters poll but signaling recovery in exports may be sluggish
due to the slowdown in Europe and emerging Asian economies.
 	
    The income surplus was up 3.9 percent, rising for the 11th
straight month thanks to steady gains from overseas investments.	
    	
    The current account balance, a broad measure of trade and
other flows, deteriorated sharply last year as exports slumped
and fuel import costs surged after the devastating March
earthquake that led to shutdowns in nuclear power plants.	
    A finance ministry official said the trade balance was
expected to remain low for the time being given worries about
Europe's recession and high energy import costs, potentially 
overshadowing growth in the income surplus.	
    "We are mindful of the impact of currency moves and crude
oil prices on the trade balance. There is no definitive picture
about the outlook," the official said.	
    Japan's economy is seen headed for a moderate recovery as
the yen's retreat from record highs and solid growth in emerging
economies ease the pain on exports.	
    But any rebound will likely be modest with companies still
hesitant to boost output and capital expenditure, keeping
pressure on the Bank of Japan to offer additional monetary
stimulus in coming months, analysts say.	
    The BOJ is expected to refrain from easing monetary policy
at a meeting that ends Tuesday but many analysts expect it to
act at another meeting on April 27, when it issues new long-term
economic and price projections.