Deep Dive:The Balance of Payments,Solidly in surplus

Event

    The MOF released the September balance of payments statistics which includeda seasonally adjusted monthly current account surplus of ￥1,477bn.

    Impact

    The current account comprises the goods, services and income balances (netpayments on assets, e.g. bond interest payments). Asset movements are thecapital account. Inbound tourism is an export of services.

    As shown below, Japan’s goods trade balance is returning to its pre-March 2011triple-disasters (earthquake, tsunami, Fukushima) level. The current accountsurplus is exceeding its 2010 highs as the service/income balance expands.

    The return to a sustained goods trade surplus from the beginning of 2016 hascoincided with a strong appreciation in the Yen.