Japan records record high current account surplus

On May 10, data released by the Japanese government showed that the country's current account surplus in fiscal 2023 increased to 25,340 billion yen (163 billion USD), up 2.8 times compared to a year earlier and the highest level ever.

March marked the first time the number of foreign tourists increased to 3 million people/month. Photo: Nikkei Asia

According to the preliminary conclusion of the Ministry of Finance , the reason was due to record profits from foreign investment and a sharp decrease in the trade deficit. The trade deficit decreased by nearly 80% (3,570 billion yen) thanks to a 2.1% increase in exports (to 101,870 billion yen) while imports decreased by 10.3% (to 105,440 billion yen).

Another factor contributing to Japan’s current account surplus is a rebound in domestic tourism, as the sharp fall in the yen makes travel and shopping in Japan cheaper for foreign visitors, according to Jiji Press. The country’s tourism surplus tripled to a record high of 4.23 trillion yen in March, marking the first time the number of foreign tourists topped 3 million a month.

A tourism surplus means that spending by foreign visitors to Japan far exceeds spending by Japanese people abroad. In March alone, the country's current account surplus rose 44% to 3.4 trillion yen, the highest since comparable data began in 1985.

Meanwhile, the government also released data showing that Japan's consumer spending fell 1.2% in March from a year earlier, the 13th consecutive monthly decline, dimming the prospect of the Bank of Japan (BOJ) raising interest rates.

Consumers look at goods at a booth in Tokyo, Japan. Photo: Saltwire

Consumption may have bottomed out, but the trend toward saving remains strong, as the cost of living is likely to continue rising due to the weakening yen, said Takeshi Minami, an economist at Norinchukin Research Institute. Unless a currency crisis erupts and capital flight takes place, the BOJ will not raise interest rates to defend the yen until at least October to confirm that the wage and price cycle is stable before raising rates.

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Source: https://www.sggp.org.vn/nhat-ban-ghi-nhan-thang-du-tai-khoan-vang-lai-cao-ky-luc-post739241.html