Balance of Payment Japan

In March 2017, Japan's current account was in a surplus of 1731 billion yen after a seasonal adjustment, a significant decline from 2294 billion yen in February 2017.

Published monthly by the Ministry of Finance. Updated till the month of March 2017 (published on May 11th, 2017).

Recent data trend:

In March 2017, the current account balance in Japan was 1731 billion yen, a significant fall from 2294 billion yen in the previous month. The fall in current account balance is mainly due to a large decline in the goods trade balance which fell to 342 billion yen in March 2017 from 831 billion yen in February 2017. The figure in March is a sharp decline from the record high acheived in February 2017, highest since November 2007, i.e. since Lehman shock.

Even though the current account balance fell in March it is still large and with the new Trump administration in US potentially eyeing Japan as a target for its new mercantilist policy, the large current account surplus may be a liability for Japan in the near term. The bulk of the surplus came not from exports but from the proceed from Japan's investment abroad. However, the large sized current account surplus may be used to argue that yen is undervalued.

Brief overview of “Balance of payment”:
 
Balance of payment statistics makes an account for all the flow of funds across Japan’s border. In these statistics, financial flows are divided into two large categories. One category is called capital and financial account. Financial transactions that lead to transfers of assets/liabilities are included in the capital and financial account. The other category, known as current account, includes other transactions such as trades of goods and services, payment of interest and dividends and transfers such as international aids.
 
Japan has consistently recorded a surplus in its current account since 1981. The surplus consisted mostly of trade account surplus until mid 2000s. In recent years, the income account surplus has increasingly become a dominant source of the surplus, while Japan’s trade surplus diminished, even falling to a deficit between 2011 to 2015. While the fall in energy prices helped return the trade balance back to surplus in 2016, it is uncertain if the trade surplus would persist. 

Balance of Payment (Annual data, 1970-2016)

Note: The Japanese government publishes its Balance of Payment (BoP) statistics following BPM6 (Balance of Payments and International Investment Position Manual, 6th edition) going back to 1996. The BoP statistics we (JMA) show here for 1985-1995 are based on BPM5. The YoY change and YoY% growth we show here for 1996 is also based on BPM5, as the BPM6-based BoP statistics is available for 1996, but not for 1995. For 1970-85 the Japanese government has published the Balance of Payment Statistic in the USD denomination. We have converted it to Japanese Yen using average USD/JPY exchange rate for each year, except for 1970-72 for which we used end of the year USD/JPY exchange rates. 

Source: MoF, JMA

The Next Release Date: June 8th, 2017.

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