Japan’s Current Account Widens to 2.0 Trillion Yen Surplus

Japan’s current-account surplus stood at 2.0 trillion yen for August, supported by a pickup in trade in goods.

Key Points

  • The surplus widened 23 percent from a year earlier
  • The median estimate of economists surveyed by Bloomberg was for a surplus of 1.54 trillion yen

Big Picture

The numbers come as the yen has appreciated this year, gaining 16 percent, to make it one of the strongest performers among major currencies. Its strength has put pressure on Japanese exporters and threatened to undermine the nation’s trade surplus. However, cheap energy imports have generally kept the trade balance positive, supporting the current-account surplus.

Economist Takeaways

  • The surplus largely reflected a pickup in merchandise trade, said Marcel Thieliant, senior Japan economist at Capital Economics in Singapore.
  • "The current-account surplus will probably be close to 4 percent of GDP this year, which is quite big," he said before the figures were released. "Japan has a large surplus, and also has a very strong net foreign asset position."
  • Thieliant added that oil prices are still low, so Japan is unlikely to experience trade deficits for the time being.
  • "We’ve seen quite a bit of a fall in the income balance, which is obviously due to the stronger yen over the last couple of months," said Thieliant.
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