Japan’s current account surplus soared to a record 29.3 trillion yen ($192.67 billion) in 2024, driven by strong returns on foreign investments and a narrowing trade deficit, according to finance ministry data released Monday.
Key Drivers of the Record Surplus
- Primary income surplus: Reached a record 40.2 trillion yen, fueled by Japanese companies expanding overseas and investing in foreign securities.
- Trade deficit shrinks: Down 40% to 3.9 trillion yen, supported by strong automobile and chipmaking equipment exports and lower energy import costs.
- Tourism boost: Travel surplus climbed to 5.9 trillion yen, reflecting a surge in inbound tourism.
Yen Weakness and Overseas Investments
Despite the surplus, Japan’s currency remains weak as companies reinvest foreign earnings instead of converting them into yen.
“There is no reason to repatriate because overseas investments yield higher returns than at home,” said Takeshi Minami, chief economist at Norinchukin Research Institute.
Trade Surplus Under U.S. Pressure
Japan’s $68.5 billion trade surplus with the U.S. has drawn attention from President Donald Trump. During Prime Minister Shigeru Ishiba’s first White House visit, Trump urged Japan to reduce the imbalance.
Conclusion
Japan’s record current account surplus highlights its shift from a traditional export-led economy to one driven by global investments. However, pressure from the U.S. and a persistently weak yen could shape Japan’s economic policies in the coming months.
