Japan’s current account balance for November 2025 reported a robust surplus of JPY 4,483 billion, surpassing the market estimate of JPY 2,468 billion and the October figure of JPY 3,776 billion. This represents a 18.70% month-on-month (MoM) increase and a significant recovery from the mid-year trough of JPY 1,348 billion in August. The Sigmanomics database highlights this as the highest surplus since April 2025, reflecting strong export performance and improved income receipts.

Drivers this month

• Export growth accelerated, particularly in automotive and electronics sectors.
• Income balance improved due to higher foreign investment returns.
• Import costs moderated amid stable energy prices.

Policy pulse

The Bank of Japan’s continued accommodative stance supports export competitiveness through a weaker yen, while fiscal prudence maintains macro stability. The current account surplus aligns with the central bank’s inflation and growth targets, providing room for gradual policy normalization.

Market lens

Immediate reaction: The JPY strengthened by 0.50% against the USD within the first hour post-release, reflecting confidence in Japan’s external position. Equity markets showed mild gains, with exporters benefiting from the data.

The current account surplus of JPY 4,483 billion in November 2025 contrasts sharply with the negative balance of JPY -257.60 billion recorded in March 2025. Over the past 12 months, the average surplus stood at approximately JPY 2,900 billion, underscoring the recent strength. Core macroeconomic indicators such as GDP growth, trade balance, and income flows underpin this trend.

Trade balance

Exports rose by 7.20% YoY, driven by demand from Asia and North America. Imports increased by a modest 2.10%, reflecting subdued commodity prices and efficient supply chains.

Income balance

Net income from abroad improved by 12%, supported by higher dividends and interest receipts from overseas investments.

Monetary policy & financial conditions

The Bank of Japan’s yield curve control and low interest rates continue to support export competitiveness. Financial conditions remain accommodative, with stable credit growth and moderate inflation at 1.40% YoY.

Fiscal policy & government budget

Japan’s fiscal deficit narrowed slightly to 3.50% of GDP, aided by strong tax revenues and controlled spending. This fiscal discipline complements the external surplus, reducing reliance on foreign borrowing.

Drivers this month

• Automotive exports 9.50% YoY
• Electronics exports 6.80% YoY
• Energy imports down 3.20% MoM

Policy pulse

The Bank of Japan’s policy framework remains supportive, with stable short-term rates and a controlled yield curve. The current account strength reduces pressure on the yen, allowing gradual monetary policy normalization.

Market lens

Immediate reaction: USD/JPY fell 0.50% post-release, reflecting yen appreciation. Japanese equities, especially exporters, gained 0.80% in early trading.

Looking ahead, Japan’s current account surplus trajectory depends on global demand, currency movements, and geopolitical developments. The Sigmanomics database suggests three scenarios:

Bullish scenario (30% probability)

• Global growth accelerates, boosting exports by 8-10% YoY.
• Yen remains stable or weakens moderately, enhancing competitiveness.
• Geopolitical tensions ease, supporting trade flows.
• Surplus could exceed JPY 5,000 billion by Q1 2026.

Base scenario (50% probability)

• Moderate export growth of 5-7% YoY.
• Yen fluctuates within current ranges.
• Fiscal and monetary policies remain steady.
• Surplus stabilizes around JPY 4,000–4,500 billion.

Bearish scenario (20% probability)

• Global slowdown reduces export growth below 3% YoY.
• Yen appreciates sharply, hurting export margins.
• Geopolitical shocks disrupt supply chains.
• Surplus contracts to below JPY 3,000 billion.

Risks & opportunities

Upside risks include stronger-than-expected global demand and improved trade terms. Downside risks stem from geopolitical tensions, supply chain disruptions, and yen volatility. Monitoring these factors is crucial for policy calibration and market positioning.

Japan’s November 2025 current account surplus signals a resilient external sector amid a complex global environment. The strong export and income balance performance supports the yen and underpins macroeconomic stability. While monetary and fiscal policies remain aligned with growth and inflation goals, vigilance is warranted given external uncertainties. The data from the Sigmanomics database underscores the importance of Japan’s trade and investment linkages in shaping its economic outlook.

Investors and policymakers should weigh the balanced risks and opportunities, preparing for scenarios ranging from sustained surplus growth to potential moderation. The current account remains a vital barometer of Japan’s economic health and its integration into the global economy.