* This is an English translation of Japanese original released on March 19, 2007

August 21, 2007
Bank of Japan
International Department

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I. Summary

Japan's current account surplus increased to 19.8 trillion yen in 2006, up from 18.3 trillion yen in 2005, while the capital and financial account deficit (net outflow) decreased to 12.3 trillion yen in 2006, down from 14.0 trillion yen in 2005. Reserve assets increased by 3.7 trillion in 2006, which was a larger increase than the one recorded in 2005 (2.5 trillion yen). Developments in each account reflect worldwide economic growth, a rise in foreign interest rates, and the globalization of Japanese companies. Balance of payments data for the whole of 2006, the second half of 2006, and the fourth quarter of 2006 in this report are preliminary unless otherwise stated.

Figure 1: Balance of Payments

Note: "p" denotes preliminary data. The same applies to the remainder of the report.

Table 1: Japan's Balance of Payments

Notes:	1.	Negative figures represent capital outflows. Negative figures in "Changes in reserve assets" represent an increase in reserve assets.
	2.	Figures for portfolio investment and other investment exclude securities lending transactions.

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