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.

2. 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.
The shortfall in the widest measure of the nation’s trade was
264.1 billion yen ($2.8 billion) in December, the Ministry of
Finance said in Tokyo today. The median estimate of 23
economists surveyed by Bloomberg News was for a deficit of
144.2 billion yen.
Weakness in global demand, a spat with China and increased
energy imports because of nuclear plant shutdowns are
weighing on the world’s third-biggest economy as Abe pushes
the Bank of Japan to end deflation and spur growth. The
yen’s slide against the dollar is offering the prospect of an
export revival.

3. “It will be three-to-six months before we see a substantial pick up in
exports,” Takahiro Sekido, a strategist in Tokyo at Bank of Tokyo-
Mitsubishi UFJ Ltd. who formerly worked at the Bank of Japan, said
before the report. “The current-account position provides another
incentive for Abe to continue his campaign.”
The yen has depreciated more than 14 percent since mid-
November when the previous government announced an election
that brought Abe to power. The currency was 0.1 percent higher at
93.58 per dollar as of 11:08 a.m. in Tokyo. The Nikkei 225 Stock
Average 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 in
February 1981, according to the ministry. The 2012 annual current
surplus of 4.7 trillion yen was the lowest since at least 1985, falling
51 percent from the previous year, the ministry said. The calculation
method was changed in 1985, according to the ministry.

4. Forecast Raised
Toyota Motor Corp (TOYOTA)., the world’s biggest carmaker,
on Feb. 5 raised its profit forecast for the year ending in
March to a five-year high as the depreciating yen raises the
value of its cars sold overseas. Mitsubishi Heavy Industries
Ltd. this week raised its forecast for the same period.
Sony Corp (SONY). yesterday announced its eighth straight
quarterly loss on sluggish sales of liquid-crystal display sets,
digital cameras and personal computers.
Japan’s economy shrank in the second and third quarters of
last year. The median forecast in a survey of economists by
Bloomberg News is for a 0.4 percent annualized expansion in
the three months through December, up from a 0.6 percent
contraction in a survey last month.

5. China Dispute
Exports to China in 2012 fell 10.8 percent from 2011, as slower
Chinese growth and a territorial dispute affected a merchandise
trade relationship worth 26.5 trillion yen in 2012, according to
ministry data.
Separately, China’s exports rose a more-than-expected 25 percent
in January from a year earlier, the nation’s customs administration
said today in Beijing.
Tokyo Electric Power Co. widened its loss forecast to 120 billion
yen for the year ending in March this week as the shutdown of
nuclear power plants and rising prices for energy imports weigh on
the company’s bottom line.
BOJ Governor Masaaki Shirakawa said Feb. 6 he would step down
on March 19, almost three weeks before the end of his term,
accelerating a leadership transition that may boost Abe’s campaign
for aggressive easing.