Japan's Current Account Swings to Deficit for First Time in 17 Months

Japan recorded a current account deficit in June 2026 for the first time in 17 months. This occurred amid rising dividend payments to foreign investors and surging oil import costs.

Data from Japan’s Ministry of Finance showed the current account recorded a deficit of 92.3 billion yen (approximately Rp988 billion) in June.

This realisation was the opposite of economists’ forecasts in a Reuters poll, which had predicted a surplus of 1.51 trillion yen. In June of the previous year, Japan still recorded a current account surplus of 1.28 trillion yen.

The main cause of the weakening stemmed from a shrinking primary income surplus. This is usually the largest source of Japan’s current account surplus.

The net balance of income from securities investment and direct investment fell 74% to 380 billion yen. This decline occurred due to increased dividend payments from Japanese companies to foreign investors.

In addition, the surge in oil import costs contributed to Japan’s trade deficit in June. This condition then helped push Japan’s current account into deficit territory.

Despite recording a deficit in June, Japan’s current account performance throughout the first half of 2026 still recorded a large surplus. Japan’s current account surplus in the first six months of this year increased 22.5% to 17.4 trillion yen, also becoming the highest on record.

This performance was mainly driven by a trade surplus supported by strong semiconductor exports for artificial intelligence (AI) data centre needs.

Thus, the June deficit does not yet indicate a comprehensive change in Japan’s external position. However, the data shows pressure from rising energy import costs and profit payments to foreign investors.