Japan has reported its largest current account surplus in 18 months for September, thanks to a positive swing in the trade balance and significant gains from overseas investments, according to data from the Ministry of Finance (MOF).
The current account surplus for September reached 2.72 trillion yen ($18.03 billion), slightly below the economists' median forecast of 3.0 trillion yen from a Reuters poll. This marks the eighth consecutive month of a surplus, underscoring Japan's efforts to maintain a robust economic position.
In recent times, Japan's current account has faced challenges, primarily due to high energy costs and a weak yen, impacting the nation's heavy reliance on fuel and raw material imports. Furthermore, Japan's status as an export powerhouse has dwindled over the years, partly due to the relocation of production by companies to overseas locations. As a result, Japan has increasingly turned to overseas investment as a significant source of earnings.
Analyzing the current account data, it becomes apparent that the primary income surplus generated from Japan's direct investment and portfolio investment amounted to approximately 3 trillion yen in September. This figure overshadowed the trade surplus, which stood at 341 billion yen.
For the first half of the fiscal year, Japan posted a record current account surplus of 12.7 trillion yen. Primary income gains played a pivotal role, amounting to around 18.4 trillion yen, surpassing the trade deficit of 1.4 trillion yen.
This data reflects Japan's ongoing efforts to maintain a competitive economic position and navigate the challenges posed by global economic dynamics.