The nation's surplus in the broadest measure of trade plunged 18.2 percent in May from a year earlier with an increase in imports outpacing that in exports, the Finance Ministry said Wednesday.
The surplus in the current account -- trade, investment flows and cash transfers -- fell year-on-year to 840.2 billion yen after three months of increase, according to the provisional figures.
Factors underlying the shrinkage of surplus in goods-and-services trade -- the main ingredient of the balance -- remain unchanged, a ministry official said. These factors are the yen's appreciation against the dollar, higher oil prices and expanding trade with the rest of Asia.
The official pointed out that a year-on-year change in the current-account balance has recently been hinged on whether import growth outpaces the increase of exports or the other way around.
c The surplus in merchandise trade -- exports minus imports -- dropped 24.1 percent to 723.4 billion yen, making it the biggest component of the current-account balance.
Total exports rose 8.1 percent, with a surge in semiconductors to the rest of Asia and automobiles to the United States.
Imports meanwhile jumped 20.5 percent as crude oil and oil products soared in value terms. The average yen-based oil price in May was 44.5 percent higher than a year earlier.
Both exports and imports increased for seven straight months, although imports have been generally stronger during the period.
The service deficit came to 405.4 billion yen, down by 50.8 billion yen, partly because yen-based payments for miscellaneous services declined due to the stronger yen.