Explanation of "Balance of Payments Statistics (Data Based on the BPM6)"
May 2016
Bank of Japan
International Department
Basic information
Compilation section:
Balance of Payments Division, International Department, Bank of Japan
The balance of payments (BOP) statistics are compiled by the Bank, which is entrusted by the Minister of Finance under the Foreign Exchange and Foreign Trade Act (referred to as the "Foreign Exchange Act" hereafter).
Frequency of compilation:
Balance of Payments (Preliminary): monthly
Balance of Payments (Second preliminary): quarterly
Balance of Payments (Annually revised): annual
Regional Balance of Payments: quarterly
Regional Balance of Payments (Annually revised): annual
Time of release:
Balance of Payments (Preliminary): on the sixth business day of the month after next
Balance of Payments (Second preliminary): on the sixth business day of the first month of the quarter after next
Balance of Payments (Annually revised): on the sixth business day of April of the next year and the year after next
Regional Balance of Payments: on the sixth business day of the second month of the quarter after next
Regional Balance of Payments (Annually revised): on the sixth business day of May of the next year and the year after next
Method of release: Bank of Japan web site
The BOP statistics are jointly released by the Bank and the Ministry of Finance (MOF).
- Data are available on the Bank's web site in the BOJ Time-Series Data Search.
- Data for main components are also available on the MOF web site.
For an overview of methods and other aspects of the release of the BOP related statistics, see IV. Reference Materials.
Contents
I. Definition
The Balance of Payments (BOP) is a statistical statement that systematically summarizes the economic transactions of an economy with the rest of the world during a period. Transactions between residents and nonresidents are recorded under the following accounts according to their nature: (1) the current account for transactions in goods, services, and income, as well as current transfers; (2) the financial account for transactions involving increases/decreases in external financial assets and liabilities; and (3) the capital account for transactions in nonproduced nonfinancial assets and capital transfers.
The main source data are reports submitted under the Foreign Exchange Act, including reports on payments and receipts (referred to as payment reports hereafter).
II. Methodologies
A. Accounting Principles
Japan's BOP statistics are compiled in accordance with the sixth edition of the Balance of Payments and International Investment Position Manual (BPM6) published by the International Monetary Fund (IMF) in 2008. The IMF requires member countries to provide information on their BOP statistics under the provisions of Article 8, Section 5 of the Articles of Agreement of the International Monetary Fund. BPM6 establishes the standard international rules for the compilation of BOP statistics and provides guidelines on the reporting format to the IMF.
The major accounting principles are described below.
1. Residence
The concept of residence does not reflect nationality or legal criteria, but is based on a transactor's center of predominant economic interest. That is, BPM6 treats an institutional unit as resident in an economic territory when there exists, within the territory, some location on which or from which the unit engages in economic activities on a significant scale over a long period of time. With regard to the location, in principle, the "actual or intended location for one year or more" is used as an operational definition.
Japan's BOP statistics are compiled primarily by employing source data derived from reports submitted under the Foreign Exchange Act. The Foreign Exchange Act provides definitions of a resident and a nonresident, and the "notification of the Ministry of Finance regarding the interpretation and application of the Foreign Exchange Act and ordinances" further establishes residency criteria (see table below).
| Definitions under the Foreign Exchange Act | Residency criteria established in the MOF notification (examples) | |
|---|---|---|
| Resident |
|
For persons:
|
| Nonresident |
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For persons:
|
2. Double-entry system
The BOP statistics are compiled applying the double-entry system, in which each transaction is recorded as consisting of two entries, a credit entry and a debit entry, of equal value. In principle, the sum of all credit entries equals the sum of all debit entries.
Exports of goods and services, receipts of income, decreases in assets, and increases in liabilities are recorded as credits, while imports of goods and services, payments of income, increases in assets, and decreases in liabilities are recorded as debits. For example, when a resident sells goods to a nonresident in return for cash, the exports are recorded as credit and the increase in cash (financial assets) is recorded as debit.
3. Valuation
In principle, a transaction is valued at its transaction price.
4. Time of recording
In principle, a transaction is recorded using the accrual basis.
5. Currency conversion
Japan's BOP statistics are compiled and disseminated in yen terms. Foreign-currency denominated transactions are, in principle, converted into yen at the prevailing foreign exchange market rate. The exchange rates used for conversion are either of the following.
a. When a reporter reports a foreign-currency denominated transaction in yen terms
When a reporter reports a foreign-currency denominated transaction in yen terms, the exchange rate used for conversion is stipulated under Article 35 of the "ministerial ordinance concerning reporting of foreign exchange transactions, etc." Specifically, depending on the type of transaction, the transaction is to be converted (1) at the exchange rate prevailing on the day of the transaction, action, or payment to be reported, or the last day of that month, or (2) at the exchange rate posted by the Bank as stipulated by the Minister of Finance (ministerial ordinance rate).
b. When the Bank converts a transaction denominated in a foreign currency into yen in compiling the statistics
When the Bank converts a transaction denominated in a foreign currency into yen, the exchange rate used for conversion is the exchange rate prevailing in the corresponding month.
B. Components
The components of Japan's BOP statistics are based on BPM6. That is to say, while the "standard components" in BPM6 provide the basis for Japan's BOP statistics, various additions are made to facilitate analysis and research. For example, net values (balances) are provided for the main components, and some components are broken down into more detailed items. The main components of Japan's BOP statistics are shown below.
1. Structure of Japan's BOP statistics (list of the main components)
- Current account
- 1.A Goods and services
- 1.A.a Goods
- 1.A.a.1 General merchandise on a balance of payments basis
- 1.A.a.2 Net exports of goods under merchanting (credit)
- 1.A.a.3 Nonmonetary gold
- 1.A.b Services
- 1.A.b.1 Transport
- 1.A.b.2 Travel
- 1.A.b.3 Other services
- 1.A.b.3.1 Manufacturing services on physical inputs owned by others
- 1.A.b.3.2 Maintenance and repair services n.i.e.
- 1.A.b.3.3 Construction
- 1.A.b.3.4 Insurance and pension services
- 1.A.b.3.5 Financial services
- 1.A.b.3.6 Charges for the use of intellectual property n.i.e.
- 1.A.b.3.7 Telecommunications, computer, and information services
- 1.A.b.3.8 Other business services
- 1.A.b.3.9 Personal, cultural, and recreational services
- 1.A.b.3.10 Government goods and services n.i.e.
- 1.A.a Goods
- 1.B Primary income
- 1.B.1 Compensation of employees
- 1.B.2 Investment income
- 1.B.2.1 Direct investment
- 1.B.2.2 Portfolio investment
- 1.B.2.3 Other investment
- 1.B.3 Other primary income
- 1.C Secondary income
- 1.A Goods and services
- Capital account
- 2.A Capital transfers
- 2.B Gross acquisitions (DR.)/disposals (CR.) of nonproduced nonfinancial assets
- Financial account
- 3.A Direct investment
- 3.B Portfolio investment
- 3.C Financial derivatives (other than reserves)
- 3.D Other investment
- 3.E Reserve assets
2. Methodologies by item
See Overview of Methodologies by Item [PDF 138KB].
C. Regional Breakdown
The BOP data are broken down by country and region of the counterparty, and data for 33 major countries and regions are disseminated quarterly in the second month of the quarter after next. In principle, data by country and region are broken down as follows:
| Exports/credits | Imports/debits | ||
| Current account | Goods | Country/region of final destination | Country/region of origin |
| Services Primary income Secondary income |
Country/region of the transactor | Country/region of the transactor | |
| Capital account | |||
| Assets | Liabilities | ||
| Financial account | Direct investment Financial derivatives (other than reserves) Other investment |
Country/region of the debtor | Country/region of the creditor |
| Portfolio investment | Country/region of the transactor | ||
Moreover, for direct investment and portfolio investment, regional data are also disseminated on a monthly basis as appendices to the BOP (Preliminary).
In addition, for direct investment flows and direct investment income, data by region and industry (where data by industry are primarily classified on the basis of the industry of the investee such as a subsidiary) are disseminated on a quarterly basis together with the BOP (Second preliminary). It should be noted, however, that the recording principle of direct investment flows employed in this breakdown differs from that for compiling the BOP, etc. For details, see Recording Principles of Direct Investment.
D. Seasonal Adjustment
For major current account items, seasonally adjusted data and the seasonal adjustment factors using the U.S. Census Bureau's X-12-ARIMA method are disseminated. For details, see Notices of Changes and Corrections on the "Balance of Payments (Data Based on the BPM6 [Data from January 2014 onward])" page posted when seasonally adjusted data are revised.
III. Other Related Statistics
A. International Transactions in Securities (based on reports from designated major investors)
The International Transactions in Securities (based on reports from designated major investors) are statistics on cross-border transactions in securities that are compiled with an emphasis on timeliness and cover only major financial institutions designated by the Minister of Finance in advance. Weekly figures are disseminated in the following week and monthly figures are disseminated in the following month by the MOF. For both portfolio investment assets and liabilities, figures for acquisitions, dispositions, and net acquisitions are disseminated by instrument: equity and investment fund shares, long-term debt securities, and short-term debt securities.
B. International Investment Position of Japan (IIP)
The IIP is a statistical statement that shows at a point in time the value and composition of financial assets of residents that are claims on nonresidents (external assets) and liabilities of residents to nonresidents (external liabilities). The IIP is compiled in accordance with BPM6. The IIP is divided into assets and liabilities and the difference between them is the net position. Items are classified following the same principles as the financial account of the BOP and are divided into the following functional categories for both the asset and liability side: direct investment, portfolio investment, financial derivatives (other than reserves), and other investment; furthermore, for the asset side they also contain reserve assets.
1. Valuation methods and source data
BPM6 indicates that positions of shares and other equity, debt securities, and financial derivatives should be recorded at market or market-equivalent value and positions of loans, deposits, and trade credit and advances should be recorded at nominal value (that is, the outstanding amount which the debtor owes to the creditor). The source data and valuation methods for the IIP are as follows.
For direct investment, the enterprise's own funds at book value, that is, the value of the enterprise recorded in the books of the direct investment enterprise (DIE), are employed for the valuation of "equity other than reinvestment of earnings" and "reinvestment of earnings," regardless of whether the DIE is listed or unlisted. The source data are reports on investment positions submitted by companies and the payment reports.
Items under portfolio investment and financial derivatives (other than reserves) are in principle recorded at their current value (that is, the market or market-equivalent value), mainly based on reports on investment positions submitted by financial institutions.
Source data for the valuation of other investment items are much in common with those for the BOP. In Japan, loans and other debt positions are valued at nominal value excluding accrued interest.
Data for reserve assets are from the MOF.
2. Changes in the IIP by factor
Factors that account for changes in the IIP are classified as follows: (a) transactions; (b) exchange rate changes; and (c) other changes.
a. Transactions
Changes in the IIP as a result of transactions refer to changes in financial assets and liabilities arising from transactions between residents and nonresidents and correspond to the financial account in the BOP for the relevant period.
b. Exchange rate changes
While in the case of the IIP exchange rates at the end of the period are employed for the conversion of foreign currency-denominated items, exchange rates at the time of transaction are used in the case of the BOP. Therefore, if exchange rates at the time of transaction and at the end of the period differ, flow data in the BOP and the corresponding changes in positions in the IIP for the same asset will not be the same. Moreover, even for items in which no transactions took place, positions may change as a result of exchange rate changes, since exchange rates at the end of each period are used for conversion.
c. Other changes
(1) Changes in market prices
The IIP is in principle compiled by revaluating external financial assets and liabilities at market value at the end of the period. Therefore, as with the case of exchange rates, changes in market prices, such as stock and bond prices, partly account for the changes in positions.
(2) Other volume changes
Other volume changes are changes in positions due neither to transactions nor to revaluation. A concrete example is write-offs arising from debtors' bankruptcy. (By contrast, debt forgiveness is treated as a transaction and is therefore not included in other volume changes.) Changes in positions due to changes in residence of parties concerned are also included. For example, if a resident holding deposits with a foreign financial institution moves overseas and becomes a nonresident, Japan's financial assets will decrease. Moreover, reclassification affects specific items, although it does not affect the total international investment position. For example, an increase in the holdings of a foreign company's equity by an investor could lead to such holdings being reclassified from portfolio investment to direct investment.
In Japan, the contribution of other changes is derived as follows. First, from the changes in positions from the previous period, the contribution of transactions to such changes is removed. Then, the contribution of exchange rate changes to the figure thus obtained is estimated. Lastly, the residual is treated as the contribution of other changes.
3. Regional breakdown
Data for 33 major countries and regions are compiled and disseminated for the year-end positions of direct investment, portfolio investment, and financial derivatives (other than reserves). In addition, data by region (for the 33 major countries and regions) and industry (where data by industry are classified on the basis of the investee such as a subsidiary) are compiled and disseminated for direct investment positions. It should be noted, however, that the recording principle of direct investment positions employed for the data by region and industry differs from that for compiling the IIP, etc. For details, see Recording Principles of Direct Investment.
C. Gross External Debt Position of Japan
The Gross External Debt Position of Japan (External Debt) systematically summarizes, at a given time, the value and breakdown of gross debt liabilities of residents to nonresidents on a market value basis. The statistics are compiled and disseminated on a quarterly basis, and data are broken down by sector, by maturity, and by debt instrument. Compared to the liability side of the IIP, the External Debt has the following characteristics: (1) only debt instruments that require the payment of principal and/or interest at some point in the future are covered, and thus equity and investment fund shares and financial derivatives are excluded; (2) information with different dimensions from the IIP, including the external debt burden and liquidity by sector, is provided.
D. External Assets and Liabilities of Banks, etc.
The External Assets and Liabilities of Banks, etc. covers the external assets and liabilities of resident banks in Japan (Japanese banks and branches of foreign banks in Japan) as aggregated from their balance sheets (reports on assets and liabilities positions submitted by banks and others). The statistics are broken down into assets and liabilities, which are further cross-classified by maturity (long-term/short-term) and currency of denomination (foreign currency/yen).
IV. Reference Materials
A. Overview of Methods and Other Aspects of the Release of the BOP Related Statistics
On the Bank's web site, data for the BOP related statistics are in principle available in the BOJ Time-Series Data Search; however, some data series are available on the Balance of Payments page. In addition, the MOF web site provides an overview of recent data published in press releases and other related materials.
Flow data
| Frequency of compilation Time of release | Available in | |
| Balance of Payments (Preliminary) |
|
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| Balance of Payments (Second preliminary) |
|
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| Balance of Payments (Annually revised) |
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| Direct Investment by Region and Industry (Quarterly data) Direct Investment Income Direct Investment Flows |
|
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| Direct Investment by Region and Industry (Annual data) Direct Investment Income Direct Investment Flows |
|
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| Direct Investment by Region and Industry (Annual data) (Annually revised) Direct Investment Income Direct Investment Flows |
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| Regional Balance of Payments -- for 33 countries and regions |
|
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| Regional Balance of Payments (Annually revised) -- for 33 countries and regions |
|
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| Seasonal Factors |
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| (Reference) International Transactions in Securities (based on reports from designated major investors) |
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| Notes: 1 | Figures are preliminary until second preliminary figures are released. With each annual revision, figures are replaced by annually revised figures. |
|---|---|
| 2 | With each annual revision, figures are replaced by annually revised figures. |
Stock data
| Frequency of compilation Time of release | Available in | |
| International Investment Position of Japan (Calendar Year Data) |
|
|
| Regional Direct Investment Position, Regional Portfolio Investment and Financial Derivatives Position -- for 33 countries and regions | ||
| Portfolio Investment Position by Currency and Type of Securities | ||
| Debt Position (Assets/Liabilities) by Currency | ||
| Debt Position (Assets/Liabilities) by Currency (Foreign Currency/Japanese Yen) | ||
| Direct Investment by Region and Industry Direct Investment Position -- for 33 countries and regions | ||
| International Investment Position of Japan (Quarterly Data) |
|
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| Gross External Debt Position of Japan | ||
| International Investment Position of Japan (Quarterly Data) (Annually revised) |
|
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| Gross External Debt Position of Japan (Annually revised) |
| Notes: 3 | With each annual revision, figures are replaced by annually revised figures. |
|---|---|
| 4 | Figures are preliminary until revised estimates are released. With each annual revision, figures are replaced by annually revised figures. |
B. Time-Series Data in the BOJ Time-Series Data Search
The following time-series data for the BOP statistics are available in the BOJ Time-Series Data Search. Data can be searched for by clicking on "Balance of Payments (BP)," under "Search by statistics."
| Time Series | Period | Standard framework (edition of the Balance of Payments Manual) |
|---|---|---|
| Balance of Payments (2014.01-) | From January 2014 onward | BPM6 -- Data for main components are linked with the rearranged data based on BPM6 for January 1996 through December 2013. |
| Regional Balance of Payments (Quarterly) (2014.01-) | ||
| Balance of Payments (-2013) | From January 1996 through December 2013 | BPM5, after the revision of the statistical treatment of financial derivatives1 |
| Regional Balance of Payments (Quarterly) (-2013) | ||
| Balance of Payments (Before the revision of the statistical treatment of financial derivatives [through Dec. 2001, Provisional]) | From January 1985 through December 2001 (Provisional) | From January 1996 through December 2001 (Provisional): BPM5, before the revision of the statistical treatment of financial derivatives1 From January 1985 through December 1995: rearranged data based on BPM5, before the revision of the statistical treatment of financial derivatives,1 although data were originally compiled based on the fourth edition2 |
| Notes: 1 | For details, see "Modification of Structure on Financial Derivatives" released on February 14, 2002. |
|---|---|
| 2 | Rearranged data for main components and seasonally-adjusted current account items are available from January 1985 and for the other items from January 1991. |
Rearranged BOP and IIP data from 1996 through 2013 based on BPM6, which were originally compiled based on the fifth edition of the Balance of Payments Manual (BPM5), are available on the Balance of Payments page. For further information, see Release of the Historical Balance of Payments and International Investment Position Data Rearranged Based on BPM6 released on April 8, 2014. For revision of the data, see also Notices of Changes and Corrections on the page.
C. Related Web Sites
The Balance of Payments and International Investment Position Statistics on the IMF web site provide related materials, including the full text of BPM6 and explanations about the switch-over from BPM5 to BPM6.
