Japan Records First Current Account Deficit in 17 Months

The Ministry of Finance of Japan reported a current account deficit of 92.3 billion yen ($584.51 million) for June, the country's first such deficit in 17 months. This outcome deviated significantly from economist expectations, which had forecasted a surplus of 1.51 trillion yen.

The deficit resulted from a 74% contraction in the net balance for primary income from securities and direct investment, primarily due to Japanese companies increasing dividend payouts to foreign investors. Higher costs for oil imports further pressured the economy, contributing to a trade deficit for the month.

Despite the June downturn, Japan's overall current account surplus for the first half of the year reached a record 17.4 trillion yen, a 22.5% increase. This broader growth was supported by a trade surplus driven by strong semiconductor exports intended for AI data centers.