Japan’s Current Account Balance recorded a surplus of 899.8 billion yen in January, a reading significantly greater than the 783.9 billion economists expected, as exports surged 40.6 percent from the previous year. The effects of global fiscal stimulus efforts continued to drive overseas demand, with shipments to China rising at the fastest pace since 1985 while those to the US jumped 24 percent, the first annual increase in over two years. However, looking past percent-change readings, actual export volumes have recovered less than half of the decline from their peak in March 2008, hinting that the actual level of foreign demand remains decidedly lackluster compared to where it has been in recent years. Most worryingly, the increase in cross-border sales does not seem offer a recipe for sustainable growth considering the flow of stimulus cash will invariably dry up, an outcome that is likely to materialize sooner rather than later considering the widespread worries about public deficits that have taken root over recent months. Imports increased 7 percent, driven primarily by oil purchases.
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