Japan Current Account

Info

History

Chart

Impact:

Medium

Source: Ministry of Finance, Japan

Next Release:

Date:

Period: May

What Does It Measure?

The Japan Current Account measures the balance of trade, income, and current transfers between Japan and the rest of the world, indicating the country's economic position in the global market. It assesses key areas, such as exports and imports of goods and services, income from investments, and payments made to foreign entities.

Frequency

The Japan Current Account is released monthly, with the initial data often presented as a preliminary estimate subject to revisions, typically published around the 10th of the following month.

Why Do Traders Care?

Traders closely monitor the Japan Current Account because it reflects Japan's economic health and competitiveness in global trade, influencing the value of the Japanese yen (JPY) and Japanese equities. A surplus may signal economic strength, thus positively impacting currency and stock valuations, whereas a deficit could have bearish implications.

What Is It Derived From?

The Japan Current Account is derived from data collected by the Bank of Japan, which includes surveys of businesses and financial institutions regarding trade balances, investments, and transfers. The calculation employs a double-entry accounting method to ensure accurate representation of all economic transactions between Japan and foreign countries.

Description

The Japan Current Account consists of three main components: the trade balance, which looks at exports and imports of goods; the services balance, encompassing tourism and other service-related transactions; and the income balance, which includes investment income such as dividends and interest received. Preliminary figures provide insights into Japan's economic dynamics on a timely basis, while final results offer a comprehensive overview that may adjust previous assessments.

Additional Notes

The Japan Current Account serves primarily as a coincident economic indicator, reflecting current trade dynamics. It provides context for Japan's broader economic trends, including those in the Asia-Pacific region and globally, where shifts in this account can signal changes in trade policy or international economic conditions.

Bullish or Bearish for Currency and Stocks

Higher than expected: Bullish for JPY, Bullish for Stocks. Lower than expected: Bearish for JPY, Bearish for Stocks.

Legend

High Potential Impact
This event has a strong potential to move markets significantly. If the 'Actual' value differs enough from the forecast or if the 'Previous' value is significantly revised, it signals new information that markets may rapidly adjust to.

Medium Potential Impact
This event may cause moderate market movement, especially if the 'Actual' deviates from the forecast or there's a notable revision to the 'Previous' value.

Low Potential Impact
This event is unlikely to affect market pricing unless there's an unexpected surprise or a major revision to prior data.

Surprise - Currency May Strengthen
Actual deviated from Forecast on a medium or high impact event and historically could strengthen the currency.

Surprise - Currency May Weaken
Actual deviated from Forcast on a medium or high impact event and historically could weaken the currency.

Big Surprise - Currency More Likely To Strengthen
'Actual' deviated from 'Forecast' more than 75% of historical deviations on a medium or high impact event and may likely strengthen the currency.

Big Surprise - Currency More Likely To Weaken
'Actual' deviated from 'Forecast' more than 75% of historical deviations on a medium or high impact event and may likely weaken the currency

Green Number	Better than forecast for the currency (or previous revise better)
Red Number	Worse than forecast for the currency (or previous revise better)
Hawkish	Supports higher interest rates to fight inflation, strengthening the currency but weighing on stocks.
Dovish	Favors lower rates to boost growth, weakening the currency but lifting stocks.

Date	Time	Actual	Forecast	Previous	Surprise