Japan Current Account Surplus:

 https://mainichi.jp/english/articles/20210908/p2g/00m/0bu/032000c

Article:

TOKYO (Kyodo) -- Japan logged a current account surplus of 1.91 trillion yen ($17.3 billion) in July, up 24.5 percent from a year earlier, aided by increased exports to China and the United States as demand continued to recover from the coronavirus pandemic fallout, the Finance Ministry said Wednesday.

The country has remained in the black for 85 months but the surplus level was still lower than that seen in July 2019 before the outbreak of the novel coronavirus.

Ideas:

A country's current account is kind of like an bank account. Exports put money into the current account and imports take money out of the account as importer have to pay for what they buy and bring from overseas while exporter get money from overseas that comes back to Japan.

The fact that Japan has been in the black or meaning more money going in then going out shows the strength of the Japanese export industry.

It also shows there has been a lot of strong demand for Japanese products globally but of course most recently in China and more many decades the US.

Yes because of the pandemic and as especially in the spring of 2020 when global demand temporarily declined the current account surplus in 2020 might not have been as much as 2019.

Of course global demand still might not be where it was in 2021, despite big increases in exports over the past year.

Article:

Among key components, goods trade came to a surplus of 622.3 billion yen, or a 4.1-fold increase from a year earlier, as exports grew in value more than imports.

Exports surged 37.5 percent to 7.22 trillion yen, buoyed by shipments of cars, iron and steel, and auto parts.

Imports jumped 29.3 percent to 6.60 trillion yen, mainly due to a surge in the value of energy and raw material imports such as crude oil.

Ideas:

Whenever there is a trade surplus exports are more than imports. And as exports are an important part of the Japanese economy it bring in a lot of income into the country.

But it still must be remembered that while exports are definitely surging they are not the entire economy and as such they should not be though of as the only important part of the economy.

It is estimated that exports may only make up 20 percent of Japan's GPD. There is also business investment/spending, government spending, and consumer spending which all make up for Japan's GPD.

So while exports are important they are not the main driver of the economy. Consumer spending which makes up about 50 percent of Japan's GPD might be considered the main driver of economic growth.

In most if not all advanced economies, consumer spending is the biggest part of GPD and economic growth.

Unfortunately, at this present time, consumer spending, because of the pandemic is not where is should be.

Business investment/spending is important but again can't really drive complete economic growth.

And government spending, while important temporarily in periods of low growth, can only help the economy so much and should not be relied on the completely help the economy grow or help the economy get out of a tough situation as now.

Article:

Primary income, which reflects returns on overseas investments, recorded a surplus of 2.10 trillion yen, up 10.5 percent. It was boosted by increased dividend payments that Japanese companies, including automakers, received from their overseas subsidiaries amid rising sales, according to the ministry.

The service balance came to a deficit of 584.9 billion yen, larger than 415.8 billion yen a year earlier, partly because companies stepped up spending on software and services provided by overseas developers to bolster security to cope with more people working remotely.

Ideas:

Even overseas investments made by Japanese companies have increased over the past year and are an important measure to be understood. As global demand increased overseas its logical that Japanese companies would be receiving more dividend payments, which of course help the current account balance.

But at the same time, as companies were increasing their security measures they rely a lot on overseas developers instead of finding security companies and software related to Japanese companies which decreases the current account.

Article:

Japan had a small travel surplus of 22.3 billion yen in July, expanding from 21.1 billion yen a year ago.

That was in part due to an increase in the number of foreign travelers to Japan, including those related to the Tokyo Olympics from July 23 to Aug. 8. Foreign spectators were barred from the games amid the coronavirus pandemic.

Ideas:

Yes, the only reason for a small travel surplus in July was the Olympics and the 11,00 athletes including staff and whomever came to Japan beside regular tourists or those who wanted to come to Japan to watch the games.

Its unfortunate but understandable why foreign tourists were not permitted to come to Japan as it would have been a huge economic boost to the Japanese economy.

Of course maybe even more that the 2019 Rugby World Cup in the fall of 2019 that was a huge success in Japan.

Have a nice day and be safe!