Cranes load containers on a cargo ship at a pier in Tokyo. Japan’s surplus in the current account, the broadest measure of trade with the rest of the world, stood at ¥287.1bn ($2.7bn) in August.

Dow Jones/Tokyo

 Japan maintained a current account surplus for the second straight month in August, with income from overseas offsetting continuing trade deficits as the nation comes to rely more on foreign investment than exports to earn dollars to buy oil and food.

The surplus in the current account, the broadest measure of trade with the rest of the world, stood at ¥287.1bn ($2.7bn) in August before seasonal adjustment, up 82.7% from a year earlier. That was wider than expected by economists surveyed by The Wall Street Journal and the Nikkei, who estimated a surplus of ¥189.5bn.

The nation’s income surplus jumped 21% from a year earlier to ¥1.5tn, the largest for the month of August under the current data format dating back to 1985. The yen’s 1% fall against the dollar over the month helped inflate overseas income when converted into yen. But more important, profit growth at overseas auto makers, electronics makers and banks-especially those in the US-led to the surge in income surplus, ministry officials said.

“The current account surplus may rise a touch more in September, as the weakening of the yen against the dollar should lift the income surplus somewhat,” said London-based Capital Economics in a research note.

The results indicate that Prime Minister Shinzo Abe’s policy of maximising foreign investment income is bearing fruit. The jury is still out, however, on whether he can get Japanese multinationals to repatriate profits to raise wages, investments and dividends in Japan. This is something he has said is necessary to bring about self-sustaining, private sector-led economic growth.

Meanwhile, the trade balance recorded a deficit of ¥831.8bn as the weaker yen has yet to lift Japanese exports amid the continued offshoring of production. The continued shutdown of nuclear power plants in Japan more than three years after the 2011 Fukushima disaster, has kept imports of fossil fuels at elevated levels.

For the first eight months of 2014, the second straight month of black ink left the current account balance with a small surplus of ¥242bn.

Japan ran large current account surpluses just a few years ago, routinely posting an annual surplus equivalent to 3%-4% of gross domestic product, making Japan the world’s largest net creditor nation ahead of China and Germany in the last 23 years. But the recent run of trade deficits has jeopardised that status and raised questions about how long Japan can keep its current account in positive territory.

The US is by far the world’s largest net debtor, but has had little problem financing its debt due to its ability to attract foreign investment.

The current account measures trade in goods, services, tourism and investment. It is calculated by determining the difference between Japan’s income from foreign sources against payments on foreign obligations and excludes net capital investment.