Catenaa, Monday, March 10, 2025– Japan recorded the first current account deficit in January after two years, as electronics imports from China with weaker yen raised the cost.
Government data showed on Monday, Japan’s current account deficit in January stood at 257.6 billion yen or $1.75 billion, bigger than a median market forecast for a deficit of 230.5 billion yen.
The Japanese Finance Ministry’s preliminary report showed the deficit in the current account balance, one of the widest gauges of international trade, reversed from a surplus of 334.3 billion yen last year, with imports also inflated by a weaker yen.
The trade deficit nearly doubled to 2.94 trillion yen, as imports surged 17.7 percent from a year earlier to 10.44 trillion yen. Japan’s imports of smartphones and electronics parts expanded before the Chinese holiday started in late January.
Exports rose 2.1 percent to 7.50 trillion yen, helped by shipments of cars, ships and pharmaceutical products, but growth was capped due to longer-than-usual New Year holidays in Japan.
Among other key components, primary income, which reflects how much Japan earns from overseas investments, expanded 20.5 percent to 3.6 trillion yen, buoyed by increased dividends from offshore subsidiaries in the auto sector amid the yen’s depreciation.
The yen averaged 156.49 against the U.S. dollar in January, 6.8 percent weaker than a year before, according to the ministry.
The services trade deficit shrank 30.4 percent to 476.6 billion yen, helped by an expansion of the travel surplus, which stood at 708.3 billion yen.
In the reporting month, the number of foreign visitors to Japan jumped 40.6 percent from a year before to a record 3.78 million, as travelers from China more than doubled due partly to the Lunar New Year holiday.
A surplus in the travel balance means that spending by foreign visitors in Japan exceeded the amount spent by Japan residents overseas.
