Japan’s current account surplus logged a surprising surge to mark a record for November, as weakness in the yen drove income gains from portfolio investment and direct investment overseas to their highest level for the month.

The surplus came in at ¥1.8 trillion ($13.7 billion), more than three times the median forecast of economists in a Reuters poll, also helped by an easing in the trade deficit.

It is the first time in eight months that Japan saw a year-on-year surplus expansion in the current account, one of the widest gauges of international trade, with the November figure up 16.4%.

“The impact of the weak yen boosting import bills has run its course, curbing trade deficits, while the currency’s weakness helped push up yen-denominated income gains,” said Kenta Maruyama, analyst at Mitsubishi UFJ Research and Consulting.

The country’s current account surplus has long been regarded as a sign of export might and a source of confidence in the safe-haven yen, but the account has occasionally fallen into deficit on a monthly basis in recent years.

The primary income surplus, which includes interest payments and dividends from investments overseas, hit ¥3.7 trillion. It was the largest amount for the month since comparable data became available in 1985, with the previous record being ¥2.4 trillion in November 2021.

The trade deficit was ¥1.5 trillion, narrowing from the previous month’s ¥1.9 trillion, but a record for November after imports grew more than exports in value terms.

SMBC Nikko Securities economists said that a pause in both the yen’s weakening and soaring oil prices had helped reduce the trade deficit, while the travel account surplus had also grown on the back of recovery in inbound tourists.

Source : japantimes.co.jp/ For more details