Japan Posts Current Account Deficit for First Time in 2 Years
Japan recorded a current account deficit in January for the first time in two years as a weak yen inflated the cost of imports, finance ministry data showed on Monday. A boost in imports of smartphones and electronic parts in the run-up to the Lunar New Year holiday pushed up total imports during the month. Japan's current account deficit in January stood at 257.6 billion yen ($1.75 billion), bigger than a median market forecast for a deficit of 230.5 billion yen.
- The widening trade gap highlights the vulnerability of Japan's economy to fluctuations in the value of its currency, which has significant implications for its export-driven growth model.
- How will this development impact Japan's ability to maintain its fiscal stimulus policies and support economic growth in the face of a weakening yen?