Japan's current account surplus fell by 34.3% in March compared with the same month a year ago, after a massive quake and tsunami devastated exports, according to the latest release from the Ministry of Finance.
The drop was sharper than forecast. Economists had expected the current account, the broadest measure of trade, to fall by 31.3%.
The current account surplus was 1.68 trillion Yen (20.7bn USD) in March. In the previous month the surplus was 1.641 trillion Yens.
The 11 March earthquake was one of the worst ever recorded in Japan. The earthquake and ensuing tsunami have left 28,000 people dead or missing. The twin disasters immediately affected factory output at home and also supply chains around the world.
Exports are weak and we are importing things that we weren't able to make domestically, said Shuji Tonouchi of Mitsubishi UFJ Morgan Stanley Securities.
Some factories are starting to increase production, so we are heading toward a gradual recovery, but there are still risks from the electricity supply.
Economists believe exports will take time to recover, while imports will surge, as the country brings in fuel and commodities to feed the reconstruction.
However economists do not foresee the current account surplus falling into deficit as income from overseas investments remain robust.
The ministry data also showed the income balance stood at a surplus of 1.535 trillion Yen in March, down 8% from a year earlier.