10 Mar 2015
Japan current account balance improves, but FDI outflows remain high – Nomura
FXStreet (Barcelona) - The Research Team at Nomura, notes that Japanese current account surplus surged to JPY 1058bn in January, aided by lower oil prices, while corporate flows remained JPY negative with FDI outflows exceeding JPY 1trn for the fourth consecutive month.
Key Quotes
“The seasonally adjusted current account surplus inched up to JPY1058bn ($8.8bn) in January, from JPY976bn the previous month. Goods balances recorded a small surplus (JPY32bn or $0.3bn), for the first time in 40 months, while services balances remain deficits at JPY336bn ($2.8bn). Lower oil prices are improving the trade balance for the time being.”
“At the same time, the FDI balance recorded JPY1223bn ($10.2bn) of net outflows, increasing from JPY985bn of net outflows in December.”
“Japanese FDI outflows exceeded JPY1trn for the fourth consecutive month (JPY1190bn or $9.9bn), suggesting strong appetite for Japanese foreign M&A.”
“Even though the lower oil price is improving Japan’s external balance, lower oil prices also improve business sentiment among Japanese firms. As a result, they are becoming more risk-tolerant, increasing FDI.”
“We expect Japanese corporate flows to remain JPY negative.”
Key Quotes
“The seasonally adjusted current account surplus inched up to JPY1058bn ($8.8bn) in January, from JPY976bn the previous month. Goods balances recorded a small surplus (JPY32bn or $0.3bn), for the first time in 40 months, while services balances remain deficits at JPY336bn ($2.8bn). Lower oil prices are improving the trade balance for the time being.”
“At the same time, the FDI balance recorded JPY1223bn ($10.2bn) of net outflows, increasing from JPY985bn of net outflows in December.”
“Japanese FDI outflows exceeded JPY1trn for the fourth consecutive month (JPY1190bn or $9.9bn), suggesting strong appetite for Japanese foreign M&A.”
“Even though the lower oil price is improving Japan’s external balance, lower oil prices also improve business sentiment among Japanese firms. As a result, they are becoming more risk-tolerant, increasing FDI.”
“We expect Japanese corporate flows to remain JPY negative.”