Japan posts first current account deficit in nearly 1-1/2 years

Japan experienced its first current account deficit in 17 months in June, with the shortfall reaching 92.3 billion yen. This marks a significant shift from the economists' median forecast of a 1.51 trillion yen surplus and a stark contrast to the 1.28 trillion yen surplus recorded a year prior.

The primary income balance from securities and direct investment, typically a major contributor to Japan's current account surplus, saw a substantial decrease of 74 percent. This reduction to 380 billion yen was largely due to increased dividend payments made by Japanese companies to foreign investors.

Furthermore, escalating oil import costs contributed to a trade deficit in June, further exacerbating the overall current account deficit. However, for the first half of the year, Japan's current account surplus expanded by 22.5 percent, achieving a record 17.4 trillion yen. This surplus was primarily fueled by robust exports of semiconductors essential for AI data centers.