Japan’s current account surplus has fallen to the lowest levels seen in over five years during June as exports took a major hit due to the ongoing coronavirus pandemic. According to data released by the Ministry of Finance (MOF), the current account surplus shrank to 167.5 billion yen from 1.177 trillion yen in May.

On a slightly positive note, however, the figure came in better than economists’ forecast, which was for a current account surplus of 110 billion yen. The decline was driven by exports falling by 25.7% YoY in June while imports fell by 14.4%, taking the overall trade deficit higher to 157.7 billion yen for the period.

Japan’s trade-reliant economy is expected to remain under severe strain on account of weak external demand in the wake of the coronavirus crisis. Japan is already reeling under a recession, and economists expect the economic impact of the pandemic to weigh on Japanese business and consumer sentiment well into 2021.

Economists expect Japan’s economy to contract by 27.2% in Q2 2020. Although the Japanese government has lifted the state of emergency it had previously announced to contain the spread of the virus, economic recovery could be delayed further on account of a resurgence of cases in some densely populated regions across the country.