Japan's FY 2022 current account surplus down 54%

beijingwalker · May 12, 2023

Japan's FY 2022 current account surplus down 54%

May 11, 2023 (Mainichi Japan)

TOKYO (Kyodo) -- Japan's current account surplus in fiscal 2022 shrank 54.2 percent from a year earlier to 9.23 trillion yen ($68.8 billion), the lowest level since fiscal 2014, driven by a record goods trade deficit swollen by high energy prices and a weak yen, government data showed Thursday.

The surplus in the current account, one of the widest gauges of international trade, fell as the resource-poor country saw its goods trade deficit grow nearly 12-fold to 18.06 trillion yen and a weak yen inflated import costs, according to a preliminary report released by the Finance Ministry.

Imports jumped 35.0 percent to 117.68 trillion yen with crude oil, coal and liquefied natural gas among major contributors. Exports rose 16.3 percent to 99.62 trillion yen on the back of increased shipments of vehicles.

The rise in energy-related imports came as Russia's invasion of Ukraine, which began in February last year, sent crude oil and other commodity prices surging.

Japan also relies on LNG and coal imports to generate electricity through thermal power, as most of the country's nuclear reactors remain offline following the 2011 nuclear accident at the Fukushima Daiichi power plant.

The deficit in services trade, including cargo shipping and passenger transportation, rose 8.2 percent to 5.28 trillion yen due to an increase in research and development fees, as well as marketing payments overseas.

The travel balance posted a 1.43 trillion yen surplus, jumping nearly 7-fold from the previous year, boosted by a sharp increase in the number of foreign visitors to Japan after the easing of coronavirus border restrictions.

A travel surplus occurs when the amount of money foreign visitors spend in Japan exceeds what Japanese people spend overseas.

Meanwhile, primary income, which reflects returns on overseas investments, surged 22.6 percent to 35.56 trillion yen, lifted by brisk overseas operations by automakers and trading houses, as well as the weaker yen boosting dividends from overseas companies.

The yen was 20.5 percent weaker in fiscal 2022 than the previous year against the U.S. dollar and 8.0 percent against the euro.

In March alone, the country's current account surplus shrank to 2.28 trillion yen, down 29.6 percent from a year earlier, the data showed.

Imports increased 7.1 percent to 9.24 trillion yen, while exports rose 3.6 percent to 8.79 trillion yen in the month.