Japan has again set a record for current account surplus. For the fiscal year ending March 2026, the surplus reached 34.52 trillion yen or about 219 billion US dollars. This is the highest record for three consecutive years.
Preliminary data from the Japanese Ministry of Finance, quoted by Kyodo News, Wednesday, May 13, showed a surge in the surplus, mainly supported by semiconductor exports and foreign investment income amid a weak yen.
The current account is a broad indicator that measures the flow of money in and out of a country, ranging from trade in goods, services, to investment returns.
For the first time in five years, Japan's trade balance in goods has returned to a surplus. The value reached 1.36 trillion yen. The previous year, Japan still recorded a deficit of 3.03 trillion yen.
Exports rose 3.3 percent to 111.35 trillion yen. Demand for Japanese chips and electronic devices from Taiwan and a number of Asian countries was the main driver.
On the other hand, imports fell 0.8 percent to 109.98 trillion yen. The decline in oil prices also put pressure on Japan's import value. Throughout fiscal year 2025, the average oil price was recorded at 71.41 US dollars per barrel, down 13.3 percent from the previous year.
The Japanese government said the impact of the Middle East conflict due to the US-Israeli attack on Iran in late February was not yet visible in the annual data.
Japan's primary income - that is, profits from overseas investments such as dividends and interest - rose 2.1 percent to 42.28 trillion yen.
The weakening of the yen against the euro also increased the value of foreign investment gains when converted into Japanese currency. Throughout fiscal year 2025, the yen on average weakened 6.8 percent against the euro to 174.78 yen. Meanwhile, against the US dollar, the yen was on average at 150.72.
However, the services sector is still a weak point. Japan's services balance recorded a deficit of 3.88 trillion yen. The deficit widened due to increased payments for research and development abroad.
The surplus of the travel sector also fell slightly to 6.57 trillion yen from the previous 6.60 trillion yen. The increase in foreign tourists to Japan was partly offset by the increase in Japanese citizens traveling abroad.
Specifically in March, Japan recorded a current account surplus of 4.68 trillion yen, up 29.1 percent compared to the same period last year.
Japanese Ministry of Finance officials said the Middle East conflict was starting to hit Japanese trade with the region. Based on separate data, Japanese imports and exports to the Middle East fell by around 10 percent year-on-year.
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