Japan's Current Account Surplus Doubles To ¥20.63 Tril In 2023

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Japan's current account surplus nearly doubled to 20.63 trillion yen in 2023 from a year earlier, boosted by record returns on foreign investments and a sharp drop in the trade deficit, government data showed Thursday.

Primary income swelled to 34.56 trillion yen, the highest since comparable data became available in 1985, with a weaker yen inflating the value of overseas investment returns for Japanese companies.

The trade deficit more than halved to 6.63 trillion yen after exports rose 1.5 percent to 100.27 trillion yen and imports dropped 6.6 percent to 106.90 trillion yen, the Finance Ministry said in a preliminary report.

Robust auto exports, particularly to the United States, have boosted overall goods shipments from Japan, while the effects of surging prices for oil, coal and liquefied natural gas eased in value terms.

The annual trade deficit was reduced from a whopping 15.74 trillion yen in 2022 when fuel imports soared amid Russia's war in Ukraine and the yen's depreciation. Resource-scarce Japan relies heavily on energy imports.

Japan continued to benefit from a revival of inbound tourism that had been battered by COVID-related restrictions, reporting its largest-ever travel surplus of 3.40 trillion yen.

A travel surplus means spending by foreign visitors to Japan far exceeds the amount spent by Japanese overseas.

Around 25 million foreign tourists visited Japan last year, marking an over six-fold increase from the previous year, in a boost to the Japanese economy as their annual spending topped the government's target of 5 trillion yen for the first time.

The current account balance is one of the widest gauges of international trade. Japan's primary income has been supported by growth in foreign direct investments by Japanese companies and overseas dividend income.

With major central banks raising interest rates to tame inflation, overseas bond yields rose last year, boosting interest income.

In December alone, Japan reported a 744.3 billion yen current account surplus, a sharp increase from 9.5 billion yen a year earlier.

The trade balance swung back into the black with a 115.5 billion yen surplus.

Primary income stood at 1.26 trillion yen, down 26.1 percent from a year earlier but still the second highest for December.


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