Japan logs record 1.93 tril. yen current account surplus in Nov.
Ideas:
Most likely, there was not a significant increase in export volume, but a decrease in imports prices and inflation, related to energy prices and raw material prices.
Many times, its the value of imports and exports and not so much the volume of either, that determines whether there is trade deficit or trade surplus.
Japan is a resource poor country and has to import much of what it needs. As such Japan is at the mercy of global raw material and energy prices.
AT the same time, exports is a major driver of the Japanese economy as export bring money into the current account while imports take money out of the current account, like a bank account.
Again, the value of imports or exports seems to be more significant than the volume sometimes, and it seemed that way this time.
Japan maybe is becoming more and more dependent on foreign visitor spending, as the weak yen, at the present time, gives more purchasing power to foreign visitors.
But the Bank of Japan, as it increases the key rate, which will come more into balance with the US dollar, might make the purchasing power for foreign visitors less attractive, which could potentially reduce foreign visitors into Japan.
The Bank of Japan, needs to be very careful and not increase the rate too much or too fast, and watch how its going to affect the economy and affect foreign visitors in the future.
Japan has to provide more than a weak yen, to entice foreign visitors to the country, but to be fair, its done a very good job of attracting foreign visitors, and maybe the weak yen is the icing on the cake of the overall appeal of Japan for foreigners
Japan traveling overseas, at this time, might not be too appealing because of the weak yen compared to the strong dollar and or strong Euro.
Japan has got a good situation, related to foreign visitors, but at the same time, it could change very fast if the Bank of Japan increases the rate too much, which bring in in line with the US dollar, which might mean the yen is no longer weak, which might not be appealing to some foreign visitors.
There are always positives and negatives in any economy. While the weak yen increases profits for Japanese exports companies it increases prices for domestic Japanese importers, and it brings the purchasing power of foreign tourists to Japan.
An economy is always in a cyclical situation, meaning some weeks, months, or quarters there is going to be some economic growth but sometimes the growth might be much less.
But even Japanese exporters might have challenges with import prices of energy and raw materials, which could offset the gains from the export prices they get overseas.
And if there is a decrease in Japanese exports, that could offset even more the gains from overseas export prices and of course the prices of raw materials and energy prices.
The US Federal Reserve, the US central bank, has not increased the key rate for sometime, but there might still be lagging affects from the last rate increase, as sometimes it takes time for the key rate affect to move into the economy.
Weak exports might have nothing to do with rate hikes but maybe more related to consumer or business demand for certain products.
The decrease in primary income could be for many reasons, including the fact that the US interest rate was not increased. And again, there are always positives and negatives to situation in an economy.
A decline in dividend payments can be very complicated as there are always time lags and delays in payments for many reasons.
The shipping sector is in a not so good situation at this time, with global conflicts, increased energy prices, and more competition than ever in the shipping industry.
Its going to take several years, or even more, as shipping companies have to again, deal with the gulf situation, the energy price situation, and finding new profit routes to ship products they are contracted for.
Have a nice day and be safe!
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