Japan Current Account: Updated Feb. 17, 2025.

 

Japan logs record 29 trillion yen current account surplus in 2024

Article Source:  https://mainichi.jp/english/articles/20250210/p2g/00m/0bu/008000c

Commentary:
Maybe Japan keeps track of its current account a lot and seems to keep the media informed about it but there is rarely anything in the US media about the US current account.

That might be because Japan is heavily focused on exports and the need to have exports be and economic driver for the Japanese economy such as Japanese cars and recently foreign tourism which county as an export item too.

As the Japanese yen if very weak now it is positive for exporters, Japanese overseas investors and foreigner coming to Japan too.

Japan has become more dependent on exports, foreign direct investments, and foreign travelers more and more as its domestic economy just can't seem to help with economic growth.

The Bank of Japan, while suggesting the weak Japanese yen is causing havoc with importers and the domestic economy, it can't ignore the positives of the weak Japanese yen, and how its also helping the Japanese economy.

It seems Japan has become very dependent on any export that can help the economy has overall not much as worked or helped the Japanese economy but exports, foreign investments and foreign travelers to Japan.

Goods trade is always subject to consumer trends and consumer demand so it not probable that goods trade is always going to be positive each quarter or each year.

At the present time the global economy is experiencing a boom in demand for semiconductor-making equipment and the trend is only going to be get stronger.

Demand for Japanese cars is always strong or at leas very good, but that could easily change in the future if the US administration puts a tariff on products coming from overseas as it could increase prices and demand could be less than expected.

Japan is a resource-poor country which means it has to import much of what it needs and its subject to global price changes and the weak yen which inflates the prices of imported good in Japan.

It seems that at this time foreign tourists are leading the growth of the Japanese economy which makes foreign tourist spending an economic driver for the Japanese economy.

An economic driver is anything that significantly improves economic growth such as the exporting of Japanese cars globally and now foreign tourist spending in Japan.

Because the Japanese yen is very weak now its good for Japanese travelers to go to Europe or the US because of the EU Euro and US dollar are just too strong and Japanese travelers lost spending power, which means the yen buys less in the EU or the US.

If not now, it has been suggested, there might be the challenge of over-tourism in Japan is some areas such as Osaka and Kyoto which might have problems and need to impose a travel tax or something to alleviate the trash which foreigners leave and also the overcrowding at popular spots in Japan.

Have a nice day!