Japan Current Account. Updated Dec. 15, 2024.

Japan current account surplus falls 13.0% in Oct.

Article Source: https://mainichi.jp/english/articles/20241209/p2g/00m/0bu/010000c

Ideas:

Japan always places a lot of emphasis on the current account, as its like a country's bank account. A surplus means more more coming in than going out of the current account for a month or quarter. A deficit means more going out than coming in as maybe there were less factors for going out than coming for the month.

Japan, again is very concerned with the current account, as maybe its used for some government programs or the government budget. While in the US you rarely hear about the current account, except for maybe on some business or economic news programs.

The fact that the Japan current account has remained in the black means its had a surplus for 21 consecutive months, which means the Japanese government can use if for a number of things such as supplemental budges, emergency budgets and so on.

The Japanese current account is not just about Japanese exports but also primary income related to overseas investment, and of course the travel surplus, which is significantly affected by the weak Japanese yen, which allows foreign tourists in Japan to have more purchasing power, meaning they can buy more for the dollars.

Because the Japanese yen is weak means that Japanese tourists traveling to the US or the EU, for example have less purchasing power for their yen, or if they use their credit cards or cash they have to pay more.

Japan has always focused a lot on goods trade as it manufacturing base is significant compared to other countries, even though Japan, like all countries has transitioned to a services economy.

An economy is made of of many different sectors and they are never the same each month as sometimes some might be positive and some might be negative.

Imports, for example, as been hit hard by the weak Japanese yen, which means importers have to pay more the imports, and then of course the average Japanese consumer has to pay more too.

The services trade sector has grown significantly in Japan as, again, Japan has transitioned into a service economy even though it still has a significant manufacturing base.

Have a nice day!