Japan's Current Account Surplus Increased for the First Time in Two Years Last Year... Travel Balance Hits Record High

[Image source=EPA Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Japan's current account surplus increased last year for the first time in two years. Although the number of Korean visitors to Japan significantly decreased due to Korea-Japan tensions, the travel balance recorded an all-time high as visitors from other regions such as China visited Japan.

According to the Nihon Keizai Shimbun, Japan's Ministry of Finance announced the preliminary balance of payments data for last year. The current account surplus last year was 20.0597 trillion yen, up 4.4% from the previous year. This is the first increase in surplus in two years. The current account surplus in December increased by 12.8% compared to the same month last year. Japan has recorded a current account surplus for 66 consecutive months.

The service balance turned to a surplus for the first time since statistics began in 1996. Last year, the service balance showed a surplus of 175.8 billion yen. This is a significant improvement compared to the previous year's deficit of 806.2 billion yen. The Nihon Keizai reported that the service balance turned positive as the number of foreign tourists visiting Japan increased and consulting fees paid overseas decreased.

In particular, the travel balance surplus within the service balance increased by 9.1% to 2.635 trillion yen, setting a new record high. Although the number of Korean visitors to Japan decreased by 25.9% due to worsening Korea-Japan relations, the overall number of foreign tourists increased by 2.2% due to more travelers from China and other regions.

On the other hand, the trade balance, which is part of the current account, saw a decrease in surplus due to factors such as the US-China trade conflict. The trade surplus was 553.6 billion yen, down 53.8% from the previous year. Exports were severely impacted, falling 6.3% to 76.1157 trillion yen. Imports decreased by 5.6% to 75.5622 trillion yen, partly due to lower liquefied natural gas (LNG) prices.

Trade with Korea saw exports decline by 12.9% to 5.0441 trillion yen and imports fall by 9.1% to 3.2287 trillion yen. As a result, the trade surplus with Korea sharply decreased by 19.0% to 1.8153 trillion yen.

Japan recorded a surplus of 20.7202 trillion yen in the primary income balance, which reflects interest and dividends earned from overseas investments, last year.

This content was produced with the assistance of AI translation services.