The result fell short of a median forecast of 1,799.9 billion yen in surplus among 20 economic research institutes polled by Jiji Press.

The year-on-year drop in May came as Japan incurred a deficit of 115.1 billion yen in goods trade, against the year-before surplus of 30.8 billion yen, on the back of a surge in resources prices that pushed up the value of the country's imports, according to the balance of payments data.

Meanwhile, the surplus in the travel account totaled 127.2 billion yen, the highest level for May, thanks to an increase in foreign visitors to Japan. Demand for travel to Japan, chiefly by South Koreans, rose back after slumping a year before because of powerful earthquakes that hit Kumamoto Prefecture, southwestern Japan, and surrounding areas in April 2016.

Japan's goods imports jumped 15.8 percent to 5,829.7 billion yen due chiefly to higher crude oil prices reflecting a production cut agreed by the Organization of the Petroleum Exporting Countries. Prices of liquefied natural gas and coal also went up.

Exports grew 12.9 percent to 5,714.5 billion yen, up for the sixth straight month, led by brisk shipments of automobiles and steel mainly to other parts of Asia.

In services trade, Japan posted a surplus of 42.1 billion yen, but the result was down sharply from the year-before surplus of 81.9 billion yen. Despite the higher travel account surplus, there was a drop in royalty income on intellectual property rights from abroad. (Jiji Press)