Japan logs 1.8 trillion yen current account surplus in November

TOKYO (Kyodo) — Japan posted a 1.8 trillion yen ($14 billion) current account surplus in November, the largest-ever for the month, as a weaker yen helped lift primary income to a record high despite the resource-scarce nation recording its biggest trade deficit on surging imports, government data showed Thursday.

It is the first time in eight months that Japan saw a year-on-year surplus expansion in the current account, one of the widest gauges of international trade, with the November figure up 16.4 percent. A nearly 54 percent year-on-year jump in primary income, which reflects returns on overseas investments, to 3.72 trillion yen could be a one-off, however. Also boosting the current account surplus, the travel surplus saw a roughly 6-fold increase over the year as Japan removed COVID-19 travel restrictions, the Finance Ministry’s preliminary data showed.

Comparable data became available in 1985.

The yen’s sharp depreciation last year inflated the value of returns on overseas investments made by Japanese firms and import costs of everything from energy to raw materials and food. For resource-scarce Japan, the weaker currency has eroded its national wealth. Japan reported a trade deficit of 1.54 trillion yen, a record for November, after imports grew more than exports in value terms.

Imports surged 33.8 percent from a year earlier to 10.55 trillion yen with crude oil, coal and liquefied natural gas among major contributors. Exports, meanwhile, gained 20.7 percent to 9.01 trillion yen, boosted by cars and machinery for construction and mining.

Crude oil was up 56.9 percent from a year earlier per kiloliter in yen terms. The dollar was at 142.44 yen, about 25 percent higher than in November 2021.

The weaker yen makes Japan an appealing travel destination for foreign tourists because overseas visitors enjoy increased spending power. While still just a fraction of pre-COVID-19 pandemic numbers, Japan took in 934,500 foreign visitors in November.

The travel balance, which reflects money spent by foreign visitors to Japan minus the amount spent by Japanese residents overseas, came to a 95 billion yen surplus, a sharp increase from 15.2 billion yen a year earlier.

Japan’s 166.4 billion yen service trade deficit is smaller than a year earlier.