Current Account Surplus Dips, As Trade Position Moves Back Into Deficit

Japan's August current account and trade balance data has printed relatively close to expectations, albeit with a modest downside surprise in the seasonally adjusted current account. This print came in at ¥1634.9bn, versus ¥2407.6bn expected and ¥2766.9bn prior. The unadjusted print was ¥2279.7bn, also a little below expected and down on the July print.

• This takes the current account surplus away from fresh highs (back to 2007), but we remain comfortably above late 2022 lows.
• The trade position slipped back into deficit at -¥749.5, slight wider than forecast (the prior outcome was (¥68.2bn).
• The wider trade deficit weighed on the current account position, although the services deficit also widened, while primary income receipts were lower compared to July.
• Japan's terms of trade proxy sits off 2022 highs, weighed by the rebound in energy prices, which is likely to remain a key driver of this index and broader trade balance trends.