Japan’s Current-Account Surplus Widens as Export Grow

Japan’s current account surplus widened in December as the global recovery boosted demand, underpinning the wealth that supports the nation’s debt burden.

The gap expanded 30.5 percent from a year earlier to 1.195 trillion yen ($14.5 billion), the Finance Ministry said in Tokyo today. The median estimate of 25 economists surveyed by Bloomberg News was for a surplus of 1.13 trillion yen.

Increased demand for exports is supporting an economy analysts expect to rebound this quarter after probably shrinking in the final three months of 2010. The surplus reinforces the view that Japan has amassed wealth that helps sustain its debt load even after Standard and Poor’s last month downgraded its credit rating for the first time in nine years.

“A recovery in the U.S. and Europe is helping to boost the surplus,” said Takuji Okubo, chief Japan economist at Societe Generale SA in Tokyo. “Given the growth prospects of the global economy, Japan will probably keep enjoying an increase in the surplus.”

The International Monetary Fund upgraded its forecast for global economic growth last month to 4.4 percent from 4.2 percent. Japan’s economy will expand at an annual 0.6 percent pace in the three months ending March 31 after shrinking last quarter, according to the median estimate of economists surveyed by Bloomberg News.

Exports increased 14.0% from a year earlier, while imports advanced 12.8% in December, the ministry data showed.

The current account surplus, the broadest measure of trade, widened 28.5 percent to 17.1 trillion yen in 2010, the first increase in three years, according to the report. The income surplus shrank 5.5 percent last year because of low global interest rates, according to the ministry.

S&P cut Japan’s credit grade to AA-, citing the government’s lack of a “coherent strategy” to address the world’s largest debt burden.

To contact the reporters on this story: Toru Fujioka in Tokyo at tfujioka1@bloomberg.net;

To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net