TOKYO, October 8, 2025: Japan recorded a current account surplus of 3.78 trillion yen ($24.9 billion) in August, down 4.8 percent from a year earlier, according to preliminary data released Wednesday by the Ministry of Finance. The decline was primarily attributed to a drop in primary income, as returns on foreign investments weakened compared to the same month last year. Primary income, which includes dividends, interest, and other earnings from Japanese investments abroad, fell 11.5 percent year-on-year to 4.30 trillion yen.
This segment has traditionally accounted for a large portion of Japan’s current account surplus and is closely monitored as a key indicator of the country’s external income. The goods trade balance showed improvement, posting a surplus of 105.9 billion yen. This marked a turnaround from the deficit recorded in August 2024. Total exports in August declined slightly by 0.4 percent to 8.36 trillion yen. The drop was offset by a steeper 6.0 percent decline in imports, which came in at 8.25 trillion yen. The contraction in imports was driven by reduced spending on energy and raw materials, in line with lower international commodity prices during the period.
The services account, however, recorded a larger deficit of 189.9 billion yen, compared with a deficit of 79 billion yen in the same month a year earlier. The increase was largely due to reduced income from intellectual property and other business services. In contrast, the travel segment within the services account saw robust performance, with the surplus hitting a record high for August at 419.5 billion yen. This growth was supported by strong inbound tourism, aided by the weak yen and sustained recovery in international travel.
Ministry of Finance releases preliminary balance data
Meanwhile, the secondary income balance, which includes remittances and other transfer payments, showed a deficit of 438.8 billion yen, widening slightly from 428.9 billion yen a year earlier. August marked the seventh consecutive month that Japan reported a current account surplus, underscoring the country’s continued position as a net lender to the rest of the world. Despite the year-on-year decline, the surplus exceeded market expectations, supported by positive trade figures and steady income from overseas assets.
The yen remained relatively weak during the month of August, providing a modest boost to the value of repatriated foreign income. However, global financial conditions, including changes in interest rates and corporate profitability overseas, played a role in dampening the overall returns on Japan’s foreign investments. Japan’s current account is a key measure of the country’s trade and investment relationships with the rest of the world.
A sustained surplus reflects Japan’s strong external financing capacity and reliance on earnings from abroad, particularly through interest and dividends from its global investment portfolio. The Ministry of Finance publishes monthly data on the current account as part of its balance of payments reporting. The current figures provide an updated snapshot of Japan’s international financial position as policymakers continue to monitor external economic developments and trade dynamics in key markets. – By Content Syndication Services.