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International Tokyo News Group, Newport Group

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Japan posted back-to-back monthly current-account deficits for the first time since 1981, highlighting challenges for Prime Minister Shinzo Abe’s campaign to revive the economy.

Japan posted back-to-back monthly current-account deficits for the first time since 1981, highlighting challenges for Prime Minister Shinzo Abe’s campaign to revive the economy.

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International Tokyo News Group, Newport Group International Tokyo News Group, Newport Group Presentation Transcript

  • Japan posted back-to-back monthly current-account deficitsfor the first time since 1981, highlighting challenges for PrimeMinister Shinzo Abe’s campaign to revive the economy.The shortfall in the widest measure of the nation’s trade was264.1 billion yen ($2.8 billion) in December, the Ministry ofFinance said in Tokyo today. The median estimate of 23economists surveyed by Bloomberg News was for a deficit of144.2 billion yen.Weakness in global demand, a spat with China and increasedenergy imports because of nuclear plant shutdowns areweighing on the world’s third-biggest economy as Abe pushesthe Bank of Japan to end deflation and spur growth. Theyen’s slide against the dollar is offering the prospect of anexport revival.
  • “It will be three-to-six months before we see a substantial pick up inexports,” Takahiro Sekido, a strategist in Tokyo at Bank of Tokyo-Mitsubishi UFJ Ltd. who formerly worked at the Bank of Japan, saidbefore the report. “The current-account position provides anotherincentive for Abe to continue his campaign.”The yen has depreciated more than 14 percent since mid-November when the previous government announced an electionthat brought Abe to power. The currency was 0.1 percent higher at93.58 per dollar as of 11:08 a.m. in Tokyo. The Nikkei 225 StockAverage was 1.1 percent lower after falling 0.9 percent yesterday.The benchmark was headed for its 13th week of gains.The last consecutive monthly current-account deficit was inFebruary 1981, according to the ministry. The 2012 annual currentsurplus of 4.7 trillion yen was the lowest since at least 1985, falling51 percent from the previous year, the ministry said. The calculationmethod was changed in 1985, according to the ministry.
  • Forecast RaisedToyota Motor Corp (TOYOTA)., the world’s biggest carmaker,on Feb. 5 raised its profit forecast for the year ending inMarch to a five-year high as the depreciating yen raises thevalue of its cars sold overseas. Mitsubishi Heavy IndustriesLtd. this week raised its forecast for the same period.Sony Corp (SONY). yesterday announced its eighth straightquarterly loss on sluggish sales of liquid-crystal display sets,digital cameras and personal computers.Japan’s economy shrank in the second and third quarters oflast year. The median forecast in a survey of economists byBloomberg News is for a 0.4 percent annualized expansion inthe three months through December, up from a 0.6 percentcontraction in a survey last month.
  • China DisputeExports to China in 2012 fell 10.8 percent from 2011, as slowerChinese growth and a territorial dispute affected a merchandisetrade relationship worth 26.5 trillion yen in 2012, according toministry data.Separately, China’s exports rose a more-than-expected 25 percentin January from a year earlier, the nation’s customs administrationsaid today in Beijing.Tokyo Electric Power Co. widened its loss forecast to 120 billionyen for the year ending in March this week as the shutdown ofnuclear power plants and rising prices for energy imports weigh onthe company’s bottom line.BOJ Governor Masaaki Shirakawa said Feb. 6 he would step downon March 19, almost three weeks before the end of his term,accelerating a leadership transition that may boost Abe’s campaignfor aggressive easing.