Japan posted a current account surplus of 4.682 trillion yen in March, up 29% from 3.625 trillion yen a year earlier, as strong overseas investment income continued to offset a deficit in services trade, data from Japan's Ministry of Finance and the Bank of Japan showed on Wednesday.
The goods and services balance recorded a surplus of 572.80 billion yen in March, up 0.2% from a surplus of 571.60 billion yen a year earlier. The goods account posted a 35.9% increase in surplus to 830.50 billion yen as exports rose 11.7% to 10.822 trillion yen from 9.691 trillion yen a year earlier, while imports increased 10% to 9.992 trillion yen from 9.079 trillion yen.
The services balance remained in deficit at 257.80 billion yen, wider by 548% from the 39.80 billion yen deficit recorded a year earlier. Primary income, which reflects returns on overseas investments, rose to a surplus of 4.631 trillion yen in March from 3.833 trillion yen a year earlier. The increase was driven mainly by direct investment income and portfolio investment income.
Secondary income posted a deficit of 522.00 billion yen, narrower than the 778.90 billion yen deficit recorded a year earlier. The capital account showed a deficit of 69.60 billion yen in March. The financial account recorded a balance of 4.308 trillion yen, while net errors and omissions stood at negative 304 billion yen.
The data comes as private-sector members of Japan's key economic advisory panel urged the Bank of Japan to proceed cautiously with monetary policy normalization, warning that prolonged geopolitical tensions in the Middle East could strain funding conditions for smaller firms.
The proposals, submitted to the Council on Economic and Fiscal Policy, called for close monitoring of inflation expectations and liquidity conditions even as the central bank signals the possibility of near-term rate hikes.
The members noted that while no clear signs of funding stress have emerged among small and mid-sized firms, higher energy costs and supply disruptions could increase financing needs. Bank of Japan data showed commitment line contracts rose by 2.5 trillion yen in March, the largest monthly increase since the pandemic period, underscoring precautionary cash buildup among companies.
The panel also stressed closer coordination between fiscal and monetary authorities and urged broader measures of fiscal assessment beyond the primary balance as Japan navigates inflation pressures, currency weakness and external risks.
