Japan books record current account deficit in January


Japan logged a record current account deficit in January, the government said in a report on Wednesday. According to the Finance Ministry, the current account deficit in the recording period stood at 1.98 trillion yen (14.4 billion U.S. dollars).

The ministry said in its preliminary report that the country had a goods trade deficit of 3.18 trillion yen (23.1 billion dollars), while services trade stood at a deficit of 758.4 billion yen (5.5 billion dollars), in the recording period. Japan’s primary income, meanwhile, which reflects returns on investments made overseas, logged a surplus of 2.29 trillion yen (16.6 billion dollars), the ministry also said.

The data is keenly eyed by the Bank of Japan (BOJ) and the Finance Ministry ahead of new potential policy changes or monetary easing or tapering measures. In Japan, a current account surplus increases the nation’s net foreign assets by the corresponding amount, and a current account deficit, as was the case in January, does the reverse. Both the Japanese government and private payments are included in the calculation and it is called the current account because goods and services are generally consumed in the current period.—APP