Japan’s June current account deficit of ¥92.3B missed forecasts for a ¥1,512B surplus, weighing on the JPY.
The Japanese Yen fell against the USD on Monday after Japan reported a surprise current account deficit of ¥92.3B in June, defying expectations for a ¥1,512B surplus. The deficit, the first in 17 months, pressured the JPY as higher oil prices and dividend outflows to foreign investors drove the shortfall.
Markets had anticipated a surplus, following a string of positive prints in prior months. The Ministry of Finance cited rising energy costs and significant overseas dividend payments as key factors behind the deterioration. The data underscores persistent external pressures on Japan’s trade balance.
Despite the weakness, expectations of further BoJ rate hikes may limit the Yen’s downside. The currency remains under broader pressure from Japan’s fiscal challenges, including public debt exceeding 200% of GDP and expansionary policies proposed by Prime Minister Sanae Takaichi.