Japan’s Current Account Surplus Plunges

Japan’s current account surplus tumbled in August due to declining overseas profits and chronic trade deficits, raising questions about the nation’s ability to rely on its status as a net creditor to ease the pain of its massive public debt pile.

The 63.7 percent annual decline in the current account surplus was the biggest in almost two years and confounded the median estimate for a 23.4 percent annual increase as the income surplus, which includes earnings from overseas subsidies, fell for the first time in nine months.

The income surplus decline could prove temporary as overseas economies remain stable. Trade deficits will be more persistent, though, as energy imports soar to make up for closed nuclear power plants, which will in turn weigh on the current account.


This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.