In November, Japan's current account surplus soared unexpectedly to 1.8 trillion yen (approximately $13.7 billion), marking its first year-over-year growth since March 2022 and setting a new record. Tokyo's Reuters reported that the trade deficit narrowed to 1.5 trillion yen from the previous month's 1.9 trillion yen, a development attributed to the weakening yen, rising oil prices, and the resurgence of the tourism sector.
The Japanese stock market continued its upward trend, with the Nikkei Index rising 1.14% to 35,449.13 points by press time, after opening 2% higher.
Long considered a key indicator of export strength and yen fluctuations, Japan's current account balance reflects the country's changing economic dynamics. Economists attributed the significant surplus to a combination of the weakening yen, high oil prices, and a revival in tourism.
Economists from SMBC Nikko Securities noted that the pause in the yen's depreciation and high oil prices helped reduce the trade deficit. Simultaneously, tourism account surpluses grew against the backdrop of an increase in inbound tourists.
Kenta Maruyama, an analyst at Mitsubishi UFJ Research and Consulting, observed:
"The impact of the weaker yen driving up import costs has subsided, containing the trade deficit, while the weaker yen has helped boost income growth when measured in yen."
Previously, Wall Street Journal mentioned that recent wage data exceeded expectations, combined with the pressure on the yen due to the earthquake in the Noto Peninsula, cooling expectations of a hawkish shift by the Bank of Japan. The Japanese stock market has been soaring this year, reaching new highs and outperforming major global indices such as the S&P 500, South Korea's Seoul Composite Index, and India's SENSEX.
Furthermore, ongoing tensions in the Red Sea region, with airstrikes by the UK and the US on multiple Houthi targets in Yemen, have propelled Asian shipping stocks. Major Japanese shipping companies like Kawasaki Kisen, Mitsui O.S.K. Lines, and Nippon Yusen saw their stocks rise.
