Japan Current Account for July: Update September 13, 2024.

 

Japan logs record surplus for July on foreign investment returns

Article Source:  https://mainichi.jp/english/articles/20240909/p2g/00m/0bu/012000c

Ideas:

A country's current account is like a bank account, as foreign investments and exports add to the current account, while imports decrease the current account.

Of course there are positives and negatives to the current account, but Japan, like many economies, not all, need the current account to be positive to pay for its high debt to GDP ratio, which is the highest among advanced economies.

The weak yen has helped with the surplus in overseas investments, but the weak yen has its negatives too, as it increases import prices, which reduced the current account.

The Bank of Japan, while worried about the weak yen and import prices has to balance out what is happening, as the current account surplus seems good for Japan, while the weak yen drives up import prices and hurts the domestic economy.

And then there is the idea of foreign tourists and the weak yen, which give them more buying power in Japan to buy more when they travel to Japan.

So the Bank of Japan has to be very careful, and balance out the needs of the domestic economy, the needs of Japanese investors in foreign countries, the needs of Japanese exporters, and the needs of foreign tourists who spend a lot in Japan.

Japan is a resource poor country, and always has to import much of what it needs, and as imports exceeded exports, the current account had a deficit, which for some countries might be a  challenge, and for Japan, it might be challenge as it has a debt to GDP ratio among the highest if not the highest among advanced countries.

Japan, for a sometime, has been behind Taiwan and South Korea in the global semiconductor race, as they are now trying to catch up or at leas get back into to the game.

Communication devices might be Samsung smartphones and or Apply I phones, which both have strong market share in Japan.

It seems like, maybe not so, but Japanese smartphone makers have given up and just aren't making any waves in the global market, for example in the EU or the US.

Japan has a way to go to be a global player in the foreign tourist market, but its making a strong push to get there, but of course its not near France or Spain in the number of foreign tourists just yet.

There is always the ideas about airline ticket prices, as maybe they have come down related to what they were before and just after the pandemic.

While there was surge of 41.9 percent in July, there are some who might think Japan now has too many foreign tourists, but tell that to all of the shops and businesses, and hotels who cater to foreign tourists and their spending money in Japan.

For some things, such as the services trade, Japan will continue to have a deficit as it to pay for digital services related to streaming and online ads. 

Of course some might say Google and Amazon, and YouTube  so on make too much relate to adds and streaming, and maybe even they are out of control, as the prices for add and so just keep going up.

Japan always focuses on the current account while the US might not give it much attention, as they always run a trade deficit as the US is a major import country, and the trade deficit doesn't seem to matter much to them.

Have a nice day!