Back to news
Japan · Central banks · Source: Bank of Japan
BoJ's Ueda: Japan's surplus now rests on investment income, not trade
Source/event date
Editor: Hedal Kolanyi / AI-assisted
Corrections: none so far. Spotted an error? Tell us via the Contact page.
Summary: In the IMF's 2026 Michel Camdessus Central Banking Lecture, Bank of Japan Governor Kazuo Ueda argued that years of corporate saving and overseas investment explain why Japan's current account surplus has lasted. In a Q&A afterwards, according to Reuters and Bloomberg, he said underlying inflation is around 2% and noted some upside risks.
What happened
Ueda gave the speech, titled "Japan's Current Account Surplus and Corporate Adjustment", in Washington on 6 November. The Bank of Japan published the text on 7 November. He said Japan's surplus has generally stayed between 2% and 4% of GDP for about four decades, while its make-up has changed. The goods surplus, above 4% of GDP in the mid-1980s, has turned into a deficit. The primary income surplus, mainly earnings on foreign investments, has risen to more than 6% of GDP.
His main argument is that companies, not households, kept the surplus alive. After the asset bubble burst, firms spent years paying down debt and became net savers in the late 1990s. Since 2012, outward direct investment has been the largest channel for capital leaving Japan. Ueda said returns on that investment held above 8% for much of the period after the balance-sheet adjustment.
He also pointed to change. In a Bank of Japan survey, more than 70% of firms said they had invested more at home in 2023–2024, most often because of labour shortages. He added that bank lending has recently been growing at more than 5%, the fastest pace in three decades, leaving aside 2020, when government support boosted small-business loans. He ended the speech with: "Japan's surplus has been remarkably persistent. The reasons for it have been rather less so."
Background
In a question-and-answer session with IMF Managing Director Kristalina Georgieva, Ueda said the Bank expects underlying inflation to stay around 2% but sees "some upside risks", according to Reuters. Bloomberg, as published by The Japan Times, reported that he did not give specific guidance on further rate rises.
Why it matters for markets and crypto
Ueda noted that Japan holds a very large stock of net foreign assets. As general background, changes in how a large creditor economy saves and invests can matter for international capital flows and exchange rates. This speech relates to the wider economy and does not concern digital assets directly. This article makes no forecast for any asset.
What to watch next
- 10 November 2026: Bank of Japan Summary of Opinions from the 29–30 October meeting.
- 17–18 December 2026: Next Bank of Japan Monetary Policy Meeting.
Sources
- Bank of Japan: Speech by Governor Ueda at the IMF Camdessus Lecture, 7 Nov 2026
- Bank of Japan: Speech full text (PDF)
- Reuters via Investing.com: BOJ chief Ueda sees 'some upside risks' to inflation, 6 Nov 2026
- The Japan Times (Bloomberg): Ueda on 2% inflation, 7 Nov 2026
- Bank of Japan: Monetary Policy Meetings schedule
Disclaimer: Xorchain Economy news is provided for general information only. It is not financial, investment, legal or tax advice, and it is not an offer or recommendation to buy, sell or hold any asset. Articles are written in our own words from official and other public sources, which are credited and linked at the end of each article. Short quotes are attributed to their authors. Articles are prepared with AI assistance and reviewed by the editor before publication. Figures may be revised by the source, and the original publication prevails. Xorchain is an early-stage project, has no token for sale, and has no affiliation with the institutions mentioned unless stated. Do your own research and consult a qualified adviser before making financial decisions.
Conflict of interest: xorchain.io is an early-stage blockchain project; the author has an interest in it. This is not investment advice.