Japan's August current account surplus rises 12% to 4.062 trillion yen
In short
Japan posted a current account surplus of 4.062 trillion yen in August, according to preliminary balance of payments data from the Ministry of Finance reported by Nikkei. The surplus was 12.0% larger than a year earlier, driven by a record primary income surplus of 5.1332 trillion yen from overseas investment returns, while the goods trade balance swung to a 687.7 billion yen deficit.
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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 the 8th, Nikkei reported. The surplus was 12.0% larger than in the same month a year earlier, and Nikkei said a wider surplus in income from overseas investment contributed. Tokyo Shimbun and Nishi-Nippon Shimbun also reported the 4.062 trillion yen figure in their headlines. [ 1 , 2 , 3 ]
The primary income balance, which covers interest and dividends from investment abroad, showed a surplus of 5.1332 trillion yen, up 21.6% from a year earlier. Nikkei reported that this was the largest surplus since comparable data began in January 1985. Within it, direct investment income was a surplus of 2.6467 trillion yen, up 24.1%, as Japanese companies received larger dividends from their overseas subsidiaries. [ 3 ]
The goods trade balance moved to a deficit of 687.7 billion yen, from a surplus of 113.8 billion yen a year earlier. Exports rose 16.9% to 9.8623 trillion yen, while imports rose 26.7% to 10.55 trillion yen and exceeded exports. According to Nikkei, exports of electronic components such as semiconductors to Asia were strong, while imports of crude oil and of electronic components such as semiconductors from the United States increased. [ 3 ]
The services balance was a deficit of 115.8 billion yen, compared with a deficit of 266.7 billion yen a year earlier. Nikkei reported that the surplus in royalties for intellectual property, including those of pharmaceutical companies and automakers, expanded. The travel balance showed a surplus of 399.9 billion yen, up 10.3%. [ 3 ]
The outlets differ on the length of the surplus streak. Nikkei reported that August was the 19th consecutive month of current account surplus, while the headlines of Tokyo Shimbun and Nishi-Nippon Shimbun describe the result as a second consecutive month, without further explanation in the text available. [ 1 , 2 , 3 ]
Why it matters
Nikkei reported that income from overseas investment, including dividends from Japanese companies' foreign subsidiaries, reached its highest level since comparable records began in January 1985, and that this was the main driver of the surplus. The same data show imports growing faster than exports, which turned the trade balance into a deficit for the month.
Key facts
- Japan's current account surplus was 4.062 trillion yen in August. [ 1 , 2 , 3 ]
- The surplus was up 12.0% from the same month a year earlier, Nikkei reported, citing Ministry of Finance preliminary data released on the 8th. [ 3 ]
- The primary income surplus was 5.1332 trillion yen, up 21.6%, the largest since comparable data began in January 1985. [ 3 ]
- Direct investment income was a 2.6467 trillion yen surplus, up 24.1%, as dividends from Japanese companies' overseas subsidiaries increased. [ 3 ]
- The trade balance was a 687.7 billion yen deficit, compared with a 113.8 billion yen surplus a year earlier. [ 3 ]
- Exports rose 16.9% to 9.8623 trillion yen and imports rose 26.7% to 10.55 trillion yen. [ 3 ]
- The services balance was a 115.8 billion yen deficit, narrower than the 266.7 billion yen deficit a year earlier; the travel surplus was 399.9 billion yen, up 10.3%. [ 3 ]
Confirmed by several sources
Still unclear
- How many consecutive months the current account has been in surplus. Nikkei reports a 19th consecutive monthly surplus, while Tokyo Shimbun and Nishi-Nippon Shimbun headlines say it is the second consecutive month; the available text from those two outlets does not say what the two-month streak refers to.
- The breakdown of the surplus, including the record primary income surplus and the trade deficit. These figures come from a single outlet, Nikkei, citing Ministry of Finance data.