Japan current account logs record surplus for second month
A man looks at a shop at the Ameyoko shopping district in Tokyo, Japan, May 20, 2022. REUTERS/Kim Kyung-Hoon/File photo
TOKYO – Japan logged its largest current account surplus for the second consecutive month in November, as the trade deficit narrowed while its service balance turned surplus due to increased inbound tourism after pandemic controls were lifted last year.
The current account data should offer relief to policymakers concerned about the specter of dwindling balance of payments, which would weaken purchasing power.
For November, the current account surplus stood at 1.93 trillion yen ($13.31 billion), Ministry of Finance data showed on Friday. That was a record for the month of November.
The trade deficit narrowed as a year-on-year decline in imports outpaced falling exports, it showed.
READ: Japan’s Nov exports fall for first time in three months
That compared with economists’ median forecast for a current account surplus of 2.39 trillion yen in a Reuters poll, after a surplus of 2.58 trillion yen in October – a record for that month.
In the past, yen strength – as strong as 75 yen to the dollar in 2011 in the wake of U.S. quantitative monetary easing – prompted Japanese exporters to shift production abroad.
While some exporters do not repatriate money earned overseas but reinvest in operations abroad, many engage in portfolio investment and others invest directly in overseas enterprises.
Return from past investment has overwhelmed Japan‘s trade account, once a symbol export might, making the primary income balance the leading source of current account funds.
For November, the primary income logged a surplus of 2.89 trillion yen, the current account data showed.
($1 = 144.9600 yen)
