Japan’s current account shrinks 63.1 per cent in first half of 2022

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Xinhua News

8th August 2022 – (Tokyo) Japan posted a current account surplus of 3.51 trillion yen (25.96 billion U.S. dollars) in the first half of 2022 from a year earlier, down 63.1 percent, as rising prices for oil and a weak yen expanded a goods trade deficit, the government said in a report on Monday.

According to the Finance Ministry, the country had a goods trade deficit of 5.67 trillion yen (41.93 billion dollars) in the January-June period, marking the second-largest deficit since 1996 when comparable data became available.

The ministry also said in its preliminary report that the country’s service trade deficit rose from 2.09 trillion yen (15.45 billion dollars) in the January-June period of 2021 to 2.49 trillion yen (18.41 billion dollars) in the first half of 2022.

Japan’s primary income, which reflects returns on investments made overseas, meanwhile, saw a surplus of 12.87 trillion yen (95.16 billion dollars), rising 22.4 percent from a year earlier, the latest data also showed.

In June alone, the country posted a current account deficit of 132.4 billion yen (978.97 million dollars), moving into negative territory for the first time in five months, dragged down by the goods trade balance turning negative, the ministry said.

Japan’s current account surplus is one of the broadest measures of its trade with the rest of the world.

The data is keenly eyed by the Bank of Japan and the Finance Ministry ahead of new potential policy changes or monetary easing or tapering measures.

In Japan, the current account surplus increases the nation’s net foreign assets by the corresponding amount, and a current account deficit does the reverse.

Both the Japanese government and private payments are included in the calculation and it is called the current account because goods and services are generally consumed in the current period. 

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