Japan recorded a historic current account surplus of 29.26 trillion yen ($193 billion) in 2024, marking the highest level on record, according to data released by the Finance Ministry on Monday. The surge was primarily driven by unprecedented returns on foreign investments, aided by a weak yen and a shrinking trade deficit. The latest figures represent a 29.5 percent increase from the previous year, continuing a two-year growth trend.
This surplus is the highest since comparable records began in 1985. The current account balance, a broad measure of Japan’s international trade and investment flows, benefited significantly from primary income gains, highlighting the country’s strong global investment position. Primary income, which tracks earnings from overseas investments, jumped 11.3 percent year-on-year to reach 40.21 trillion yen.
The rise was fueled by higher returns from foreign subsidiaries, particularly in Japan’s financial, retail, and automotive sectors. Domestic companies’ direct investments abroad and increased dividend income from overseas holdings played a key role in this expansion. Japan’s trade balance also showed improvement, with the goods trade deficit narrowing by 40 percent to 3.90 trillion yen. Exports climbed 4.5 percent to 104.87 trillion yen, bolstered by strong global demand for semiconductor manufacturing equipment and automobiles.
The export growth helped mitigate the impact of Japan’s import dependency. Imports rose by 1.8 percent to 108.77 trillion yen, reflecting increased shipments of personal computers and nonferrous metals. However, the slower pace of import growth compared to exports contributed to the overall reduction in the trade deficit. The yen’s weakness against major currencies has amplified Japan’s earnings from foreign investments, making overseas assets more valuable in yen terms.
This trend has played a critical role in sustaining the country’s record-breaking current account surplus, offsetting challenges posed by the trade deficit. Japan’s continued accumulation of overseas income underscores its shift toward reliance on global investment returns rather than domestic trade alone. The latest data reaffirms the country’s strong external financial position, reinforcing its role as a major net creditor in the global economy. – By MENA Newswire News Desk.