Japan current account deficit sharply widens

JAPAN suffered its biggest ever current account deficit last November, leading economic and fiscal affairs minister Akira Amari to warn yesterday that the country's standing as a major trading nation could be damaged if such deficits persist. Economists voiced alarm at the unexpectedly large jump.

The 593 billion yen (S$7.25 billion) deficit for November marked the second consecutive month of current account deficit for Japan and was much higher than the 380 billion yen economists had predicted.

The weak yen is a major factor behind the deficits as it raises the cost of imports (fuel especially) more sharply than the price of exports. While the yen jumped yesterday against the dollar after falls on Wall Street, it is expected to remain under the 100 mark, where it has rested for months.