Japan's August current account surplus is 4.06 trillion yen as trade swings to deficit
In short
Japan posted a current account surplus of 4.062 trillion yen in August, according to preliminary balance of payments data the Ministry of Finance released on October 8. A record monthly primary income surplus of 5.1332 trillion yen, helped by dividends from overseas subsidiaries, offset a trade deficit of 687.7 billion yen driven by higher crude oil costs, the Yomiuri Shimbun reported.
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Japan recorded a current account surplus of 4.062 trillion yen in August, according to preliminary balance of payments statistics released by the Ministry of Finance on October 8. The Yomiuri Shimbun reported that the surplus widened by 433.9 billion yen from the same month a year earlier, while TBS said it was up 12% year on year. The outlets differed on the length of the run: the Yomiuri Shimbun described it as the 19th consecutive monthly surplus, while TBS said it was the second in a row. [ 1 , 2 , 3 ]
The main driver was income from overseas investment. The primary income balance, which covers interest and dividends earned abroad, showed a surplus of 5.1332 trillion yen, the highest on record for a single month, the Yomiuri Shimbun reported, citing an increase in dividends received from overseas subsidiaries. NHK also pointed to higher dividends from overseas subsidiaries, and TBS said a sharp rise in interest and dividends from overseas investment was the main factor. [ 1 , 2 , 3 ]
Goods trade moved the other way. The trade balance fell into a deficit of 687.7 billion yen, compared with a surplus of 113.8 billion yen a year earlier. According to the Yomiuri Shimbun, imports rose 26.7% to 10.55 trillion yen as prolonged turmoil in the Middle East kept crude oil procurement costs high, while exports grew 16.9% to 9.8623 trillion yen, so import growth outpaced export growth. TBS also reported that the trade balance had turned to deficit, linking it to crude oil. [ 1 , 3 ]
The services balance, which covers trade other than goods, posted a deficit of 115.8 billion yen, 150.9 billion yen smaller than a year earlier. The Yomiuri Shimbun attributed the improvement to steady demand from inbound foreign visitors and higher fees received for the use of intellectual property held by Japanese companies. NHK also cited inbound tourism among the factors behind the overall result. [ 1 , 2 ]
Why it matters
The figures show Japan's external earnings depending on returns from overseas investment rather than goods trade, which fell into deficit as import costs rose. The Yomiuri Shimbun linked the jump in imports to persistently high crude oil procurement costs amid prolonged turmoil in the Middle East.
Key facts
- Japan's current account surplus for August was 4.062 trillion yen. [ 1 , 2 , 3 ]
- The surplus widened by 433.9 billion yen from a year earlier, according to the Yomiuri Shimbun; TBS put the increase at 12%. [ 1 , 3 ]
- The trade balance swung to a deficit of 687.7 billion yen from a surplus of 113.8 billion yen a year earlier. [ 1 ]
- Imports rose 26.7% to 10.55 trillion yen, while exports rose 16.9% to 9.8623 trillion yen. [ 1 ]
- The primary income surplus, covering interest and dividends from overseas investment, was 5.1332 trillion yen, a record for a single month. [ 1 ]
- The services balance showed a deficit of 115.8 billion yen, 150.9 billion yen narrower than a year earlier. [ 1 ]
Confirmed by several sources
- The Ministry of Finance reported a current account surplus of 4.062 trillion yen for August. [ 1 , 2 , 3 ]
- Increased dividends received from overseas subsidiaries helped lift the surplus. [ 1 , 2 ]
- Interest and dividends from overseas investment grew sharply. [ 1 , 3 ]
- The trade balance was in deficit in August. [ 1 , 3 ]
Still unclear
- How many consecutive months the current account has been in surplus. The Yomiuri Shimbun reported a 19th consecutive monthly surplus, while TBS reported the surplus as the second in a row.