Japan's current account surplus shrank 34.3 percent year-on-year to 16,280.3 billion yen (US$176.96 billion) in 2008, said a government report on Monday.

A slump in exports due to contracting overseas demand is one key factor behind the plunge in current account surplus, according to a preliminary report released by the finance ministry.

The surplus in trade of goods and services dived by 81.7 percent to 1,797.3 billion yen (US$19.54 billion), said the report.

And the balance in merchandise trade logged a surplus of 4,033.8 billion yen (US$43.84 billion), down 67.3 percent from the previous year.

In December, the current account surplus nosedived 92.1 percent year-on-year to 125.4 billion yen (US$1.36 billion).

The current account balance, the broadest gauge of trade in goods, services, tourism and investment, is calculated by determining the difference between a nation's income from foreign sources and payments on foreign obligations, excluding net capital investment.

(Xinhua News Agency February 9, 2009)