Japan Logs Record Surplus for July on Foreign Investment Returns

Japan posted a current account surplus of 3.19 trillion yen in July, a record high for the month, driven by all-time high returns on foreign investments on the back of a weak yen, the Finance Ministry said Monday.

Primary income, including dividends and interest earnings from overseas investments, rose 25.1 percent from the year before to 4.44 trillion yen, the highest for a single month since comparable data became available in 1985.

The current account balance was up 15.1 percent and in surplus for the 18th consecutive month, with a ministry official saying the fall in the yen in July compared with a year earlier had "pushed up investment returns." The yen averaged 158.06 against the U.S. dollar in the month, 11.9 percent weaker than the previous year. The Japanese currency also fell 9.7 percent to 171.09 against the euro in the same month, according to the ministry.

Japan logged a trade deficit of 482.7 billion yen, sinking into the red from a surplus of 107.2 billion yen a year earlier, as an increase in semiconductor exports was outpaced by a rise in imports of pharmaceutical products and communication devices.

Imports grew 16.8 percent to 9.90 trillion yen, while exports rose 9.7 percent to 9.42 trillion yen.

The yen's depreciation also attracted more foreign tourists to Japan, lifting the travel surplus to a record 553.4 billion yen. A surplus means that spending by foreign travelers in Japan exceeded that by Japanese tourists abroad.

The number of foreign visitors to the country surged 41.9 percent to 3.29 million in July, a record high for a single month, the Japan National Tourism Organization said last month.

The services trade deficit shrank to 532.8 billion yen as a gain in the travel surplus partly offset a deficit in digital services trade such as streaming and online ads.

The current account balance is one of the widest gauges of international trade.