JAKARTA (TheInsiderStories) – Japan managed to keep the current account surplus for two running months in early 2019, government data showed on Monday (04/07). In February, Japan’s current account increased to JPY2.68 trillion (US$ 24.12 billion) from JPY2.14 trillion in the same month a year earlier (y-o-y), or an increase of 25.2 percent.
According to available reports, this increase is the highest current account surplus since March 2018, when the reading was at JPY3.18 trillion.
The data showed a primary income surplus rose to JPY2.01 trillion from JPY 1.95 trillion a year earlier.
In addition, the goods account surplus rose to JPY 0.49 trillion from JPY 0.20 trillion as exports fell 1.9 percent year-on-year, while imports fell at 6.6 percent faster. On the other hand, the service account surplus rose to JPY 0.24 trillion from JPY 0.17 trillion.
Previously, in January 2019, Japan also recorded a current account surplus of JPY 600.4 billion ($5.4 billion). The surplus marked the 55th consecutive month of black ink.
The current account surplus is one indicator of Japan’s extensive international trade and has also been helped by strong income from foreign investment flowing into Japan.
According to official reports, the uncertain prospects for global trade, which arose in part from the friction of US-China trade, allowed heavy investment flows to Japan and will continue to support its current account.
Last year, a report issued by the Ministry of Finance regarding Japan’s international balance of payments in 2018 showed that the current account balance, economic indicators for international transactions for goods and services and investment income, had a surplus of JPY19.1 trillion.
This surplus is 13.0 percent lower than 2017, marking the first year-on-year (y-o-y) decline in four years. The high oil price, which raised the price of imported goods, was a major factor behind a significant decline in last year’s trade surplus.
However, Japan’s primary income balance continues to grow since the “Sakura country” managed to recover its trade surplus in 2005, and a clear structure has emerged where the country’s current account balance surplus is supported by investment income rather than commodity exports such as automobiles and electronic devices.
Overall, Japan recorded a trade surplus of JPY1,188 billion in 2018. This is the third consecutive year for the trade balance in the dark, but the surplus was 76.0 percent smaller than the previous year.
At the same time, the secondary income deficit narrowed to JPY 0.06 trillion from JPY 0.18 trillion a year earlier. With the increase in Japan’s current account, which is getting better, the current Japanese transition average is 1131.53 JPY billion from 1985 to 2019.
Japan has reached the highest record of all-time surpluses, namely JPY 3360.40 billion in March 2007 and a record low of JPY -1456.11 billion in January 2014.
Written by Daniel Deha, Email: email@example.com