Japan's current account surplus fell unexpectedly in December from a year earlier as companies increased dividend payments abroad, but exports continued to rise in a sign the nation's economic recovery is on a sound footing.
But Bank of Japan Governor Toshihiko Fukui warned against complacency, saying the economy is not without risks and the central bank will implement monetary policy aiming to ensure that the economy achieves sustained growth with price stability.
"We need to look at various risks carefully, evenly and closely in guiding policy," Mr Fukui told parliament today, adding that he is not as optimistic as to conclude that risks for the economy have decreased. He did not specify what those risks might be.
The current account surplus in December fell 5 per cent from a year earlier to 1.78 trillion yen ($14.7 billion), shrinking for the first time in six months and below a consensus forecast for a rise of 8.5 per cent, government data showed today.
The lower surplus in the current account, which comprises the trade balance plus credits and debits for services and overseas payments and income, was largely due to a 9 per cent fall in the income surplus as Japanese firms raised dividend payments abroad.
But the trade surplus rose 15.2 per cent to 1.22 trillion yen, as growth in exports exceeded that of imports on robust demand for Japanese goods in the United States, Europe and Asia.
Exports rose 8.6 per cent to 6.60 trillion yen in December, which was the highest amount on record, while that of imports rose 7.2 per cent to 5.38 trillion yen.
While the current account data is unlikely to have much effect on the timing of the BOJ's next interest rate hike, the firmness in exports suggests the economy will maintain its strength led by the corporate sector.