Japan Current Account:

 Article Source:  https://mainichi.jp/english/articles/20220308/p2g/00m/0bu/024000c

Article:

TOKYO (Kyodo) -- Japan logged a current account deficit of 1.2 trillion yen ($10.3 billion) in January, the second largest on record since comparable data became available in January 1985, due to surging fuel costs, the Finance Ministry said Tuesday.

The country's current account balance, one of the widest gauges of international trade, remained in the red for the second consecutive month. The deficit was the largest since January 2014, according to a preliminary report released by the Finance Ministry.

With resource-poor Japan relying heavily on energy imports, rises in energy prices sparked by the global economic recovery from the coronavirus pandemic led to a goods trade deficit of 1.60 trillion yen.

Ideas:

Japan is probably going to have a current account deficit as long as the Japanease yen is very weak.

Exports can only do so much for an ecnomy. An economy can't or shouldn't rely only on exports. Exports actually bring money into the current account, but as the yen or a currency weakens beyond a certain level it can be too much for an economy.

For example, as the currency begins to get weaker and weaker it starts to effect many different resources, products, suppliers and importers.

And it becomes a multiplier effect meaning it now begins to effect large parts of the econmy.

If the yen or a currency maybe wasn't as weak as it is, maybe it wouldn't that much of an effect but again the weaker a currency gets it begins to effect more and more of the economy.

Article:

Imports expanded 39.9 percent from a year earlier, up for the 12th month in a row, to 8.17 trillion yen. Purchases of crude oil jumped 84.6 percent while those of coal spiked 167.4 percent on year.

Exports increased 15.2 percent to 6.56 trillion yen, rising for the 11th straight month, buoyed by shipments of iron and steel, light oil and semiconductors.

Services trade, which includes cargo shipping and passenger transportation, logged a deficit of 737.9 billion yen, partly as Japanese companies' online advertising fees paid to foreign companies increased, a government official said.

Ideas:

So exports expanded 15.2 percent while imports expanded 39.9 perent. And 6.56 trillion yen for exports to 8.17 yen for imports. 

As we can see the biggest problem is crude oil which increased 84.6 percent while coal increased 167.4 percent. So if there was ever a time to try to move into alternative fuel sources now is the time to begin if energy prices continue to increase.

But of course the problem is how to get whomever to stop using coal and or fossil fuel sources and begin to move into other fuel sources, if even possible.

Services trade has never been a major area as of yet. And the fees Japanese companies were required to pay didn't help the services trade moving out of the deficit area.

But back to imports and exports, The value of both is good but it would be good too to see the actual volume of each and not just the value. Of course one can go to JETRO and see the figures there too.

Article:

The travel balance posted a 12.3 billion yen surplus, slightly down from 21.1 billion yen logged a year earlier, as 75,000 people traveled from Japan while only 17,800 people visited the country.

The Japanese government enforced an entry ban on nonresident foreign nationals in late November as the world grappled with the spread of the highly transmissible Omicron coronavirus variant.

Primary income, which reflects returns on overseas investments, posted a surplus of 1.29 trillion yen, down 13.1 billion yen from a year earlier, as more dividends were paid to foreign investors.

Ideas:

Some might think a surplus is better but for travel a deficit might be better, as international travelers spend money in Japan and Japanese travelers take money out of Japan.,

If a year earlier means 2020, it has to be remembered that from January to February travel in and out of Japan was normal. It wasn't until the first week of March 2020 that the travel restrictions started.

So even the two months of normal travel most likely there were a lot of international travelers entering Japan they were spending a lot of money in Japan.

So whether that is a year on year number of just a monthy number it is  way below what it should be.

If Japan really want to see the economy get back to the pre-pandemic level, its not going to happen without international travelers allowed into Japan.

The Japanese population are not just big spenders compared to other countries and Japan needs internatioal tourists to spend big in Japan.

For example, if can ever get it going again, the Chinese are big spenders in Tokyo and other places and businesses need the big spending Chinese international tourists.

Most all areas of business and investments are not going to be where they should be just yet as the global economy continues to have major challenges with the Ukraine war, the continued increase in energy prices, the continued increase in shipping prices, the continued increase in raw material prices, and the continued increase in food prices in supermarkets.

Have a nice day and be safe!