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Japan’s current account surplus is likely to have deteriorated in August as the weak yen continues to inflate the cost of imports, casting doubt on the country’s ability to amass foreign wealth and eroding the currency’s prized safe-haven status.
The decline comes as Japan’s foreign reserves, still the world’s second largest after China, slumps after the government’s dollar-selling intervention last month to arrest sharp yen falls.
The world’s third-largest economy likely saw its current account surplus shrink to 122 billion yen ($84.15 million) in August, half July’s level, according to a Reuters poll.
“Export volumes are weakening due to the global economic slowdown, while imports continue to balloon due to elevated energy prices and the yen’s declines,” said Takeshi Minami, chief economist at Norinchukin Research Institute.
The current account data is due at 8:50 a.m. on Oct. 11. (2350 GMT Oct. 10.)
Data released last month showed Japan ran its biggest single-month trade deficit on record in August as a 49.9-percent jump in imports, driven by surging energy costs and a slump in the yen, outstripped gains in exports.
