Japan Registers $17.3 Billion Current Account Surplus

Japan marked a current account surplus of 1.91 trillion yen ($17.3 billion) in July, growing 24.5 per cent year on year, amid the increase in exports to China and the United States where demand kept recovering from the Covid-19 pandemic fallout, according to the Finance Ministry on Wednesday.

The country has seen black ink for 85 successive months, but the level of surplus still remained lower than that in July 2019 before the Covid-19 pandemic broke out.

Among key components, goods trade showed a surplus of 622.3 billion yen ($5.6 billion), or a rise of four times from the previous year, with exports increasing more in value than imports.

Exports jumped 37.5 per cent to 7.22 trillion yen ($65.5 billion), encouraged by shipments of cars, iron and steel, and auto parts.

Imports soared 29.3 per cent to 6.60 trillion yen ($59.8 billion), mainly because of a surge in the import value of energy and raw material such as crude oil.

Primary income, reflecting overseas investments returns, logged a surplus of 2.10 trillion yen ($19.0 billion), going up 10.5 per cent.

According to the ministry, Japanese companies, including automakers, received growing dividend payments from their overseas subsidiaries amid rising sales, which contributed to this growth.

The deficit of the service balance stood at 584.9 billion yen ($5.3 billion), larger than 415.8 billion yen ($3.8 billion) in the previous year.

The red figure was due partly to the increasing expenditure by companies on software and services, provided by overseas developers, aiming at strengthening security to manage the situation that more people work from home.

A small travel surplus of 22.3 billion yen ($202.2 million) was observed in July, rising from 21.1 billion yen ($191.3 million) a year earlier. That was in part attributed to a growth in the number of foreign travellers to Japan, including those related to the Tokyo Olympics from July 23 to August 8.