Japan's Current Account Slips to Deficit in June on Dividend Outflows
Japan's current account swung to a deficit in June, its first in 17 months, as dividend payouts to foreign investors surged and oil import costs rose.
Japan's current account balance fell into deficit in June, marking the first shortfall in 17 months, according to finance ministry data released on Monday. The deficit stood at 92.3 billion yen (approximately $584.51 million), a sharp reversal from the 1.28 trillion yen surplus recorded in the same month a year earlier. Economists had forecast a surplus of 1.51 trillion yen for the month.
The swing was driven primarily by a sharp contraction in primary income from securities and direct investment, which typically underpins Japan's current account surplus. That balance shrank by 74% year-on-year to 380 billion yen, as Japanese companies paid out larger dividends to foreign investors. At the same time, rising oil import costs pushed the trade balance into deficit, compounding the pressure on the overall current account.
Despite the monthly shortfall, Japan's current account surplus for the first half of the year rose 22.5% to a record 17.4 trillion yen, supported by strong exports of semiconductors used in AI data centers.