June Current Account Surplus in Japan Drops 87% Due to "Export Slump and Decline in Tourists"

72-Month Streak of Current Account Surplus... Service Balance in Deficit for 3 Consecutive Months

[Image source=EPA Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Japan's current account surplus in June shrank by about 87% due to the impact of the novel coronavirus infection (COVID-19). Amid a decline in overall trade volume, the trade balance recorded a deficit due to sluggish automobile exports, and the travel account surplus also decreased due to a drop in tourists visiting Japan.

According to the Nihon Keizai Shimbun on the 11th, the Japanese Ministry of Finance announced through the "June International Balance of Payments Trends (preliminary figures)" that Japan recorded a current account surplus of 167.5 billion yen (approximately 1.87 trillion KRW). The surplus decreased by 86.6% compared to the same period last year. The current account surplus has continued for 72 consecutive months.

The Ministry of Finance explained that the current account surplus narrowed as the trade balance and other factors turned to a deficit. The June trade balance was recorded as a deficit of 77.3 billion yen, with exports decreasing by 25.7% to 4.793 trillion yen and imports decreasing by 14.4% to 4.8703 trillion yen. Exports sharply declined due to reduced automobile and automobile parts exports to the United States.

The services balance, which includes travel and freight transportation, turned to a deficit of 157.7 billion yen due to a sharp drop in inbound foreign tourists. The services balance recorded a deficit for the third consecutive month. The impact was significant as only 2,600 foreigners visited Japan and 10,700 Japanese departed Japan in June.

The primary income balance, which shows interest and dividend income earned from overseas investments, recorded a surplus of 426.4 billion yen. The surplus decreased by 26.5 billion yen due to a reduction in dividends received from overseas subsidiaries.

Meanwhile, Japan's current account surplus for the first half of the year, including June's results, was recorded at 7.3069 trillion yen, down 31.4% (3.3044 trillion yen) compared to the same period last year.

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