Explanation of "Balance of Payments Related Statistics (Data Based on the BPM6)"
Bank of Japan
This page provides information on the compilation of the balance of payments (BOP) related statistics. For details by item, see Japan's Balance of Payments Related Statistics: Methodologies by Item [PDF 640KB]. For a list of the statistics and information on access to the data and release schedule, see the Balance of Payments Related Statistics page.
Further information on the statistics is available on the following pages:
- I. Definition
- II. Legal Basis and Agencies in Charge of the Compilation
- III. Methodologies
- IV. Data Sources
- V. Methodologies by Item
The BOP related statistics represent the economic relationships between Japan and the rest of the world, comprising the BOP, the international investment position (IIP), and more detailed data of the BOP and IIP statistics such as breakdowns by partner economy.
- Balance of Payments (BOP) Statistics that systematically record Japan's economic transactions with the rest of the world during a certain period (flow data).
- International Investment Position (IIP) Statistics that show the value and composition of Japan's external financial assets and liabilities at a particular point in time (stock data).
The following is an overview of the components of the BOP.
- Current account
- 1.A Goods and services
- 1.A.a Goods
- 1.A.b Services
- 1.B Primary income
- 1.C Secondary income
- 1.A Goods and services
- Capital account
- 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
The components of the IIP are similar to the components of the financial account of the BOP.
II. Legal Basis and Agencies in Charge of the Compilation
Japan's BOP related statistics are compiled by the Bank of Japan, which is entrusted by the Minister of Finance under the Foreign Exchange and Foreign Trade Act (FEFTA). For more information, see FAQs on the Balance of Payments Related Statistics.
Japan's BOP related 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.
A. Accounting Principles
1. Double-entry system
The BOP statistics are compiled based on 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. 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. In principle, the sum of all credit entries equals the sum of all debit entries.
|Capital account: capital transfers
|Capital account: nonproduced nonfinancial assets
|Financial account: assets
|Financial account: liabilities
2. Time of recording
In principle, transactions are recorded on an accrual basis. However, some transactions are recorded on a settlement basis because they are only captured when they are settled.
Specifically, goods passing through Japanese customs are recorded when they cross Japan's customs frontier. Sales and purchases of securities are generally recorded when transactors have committed themselves to the transaction. By contrast, service and income transactions are generally recorded when the settlement funds are received or paid.
Transactions in principle are valued at their transaction price. However, goods passing through Japanese customs are recorded at their free on board (FOB) value.
Positions in principle are valued at their market price. For direct investment positions, however, values recorded in the books of subsidiaries are employed, while market values are also estimated for reference. Loans and other debt positions under other investment are valued at their nominal value excluding accrued interest.
4. Currency conversion
Japan's BOP related statistics are disseminated in yen terms. The exchange rates used to convert foreign-currency denominated transactions or positions into yen vary depending on the source data. The exchange rate to be applied is as follows.
- a. When a reporter reports a foreign-currency denominated transaction or position in yen terms under the FEFTA (see IV A. Reports Submitted under the FEFTA), the transaction or position is to be converted at either of the following exchange rates, depending on the reporting form used:
- (1) the exchange rate prevailing on the day of the transaction to be reported, or on the last day of that month, or
- (2) the exchange rate posted by the Bank as stipulated by the Minister of Finance (ministerial ordinance rate) -- that is, in principle, the monthly average of the exchange rate of the second preceding month of the relevant month.
- b. When the Bank converts a reported transaction or position denominated in a foreign currency into yen while compiling the statistics, the applicable exchange rate is the rate prevailing in the relevant month.
Japan's BOP related statistics cover transactions and positions between residents in Japan and nonresidents.
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, the 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. In principle, "actual or intended location for one year or more" is used as an operational definition. When a corporation engages in economic activities in a foreign country on a significant scale over a long period of time, such activities are deemed to be conducted by a quasi-corporation that is treated as a resident in the foreign country. Embassies and military bases are treated as territorial enclaves.
Japan's BOP related statistics are compiled primarily by employing source data derived from reports submitted under the FEFTA. The FEFTA provides definitions of residents and nonresidents, and "Notification of the Ministry of Finance regarding the Interpretation and Application of the FEFTA and Ordinances" further establishes residency criteria (see the table below).
|Definitions under the FEFTA
|Residency criteria established in the MOF Notification (examples)
C. Seasonal Adjustment
For major current account components, seasonally adjusted data and seasonal adjustment factors based on the U.S. Census Bureau's X-12-ARIMA method are disseminated. For details, see Notices of Changes on the Balance of Payments Related Statistics page, which is updated when seasonally adjusted data are revised.
IV. Data Sources
The main data sources for Japan's BOP related statistics are reports submitted under the FEFTA. Data compiled by other agencies are also used.
This section provides an overview of the data sources. For details on the compilation of each item, see V. Methodologies by Item.
A. Reports Submitted under the FEFTA
The BOP related statistics are compiled primarily using the following reports submitted under the FEFTA: (1) reports on payment etc.; (2) reports on capital transactions; (3) reports on matters concerning foreign exchange services; and (4) other reports submitted for the preparation of the statistics.
This page provides an overview of such reports in relation to the compilation of the BOP related statistics. The "Ministerial Ordinance concerning Reports on Foreign Exchange Transactions etc." (referred to as the "Ministerial Ordinance" hereafter) stipulates the specific requirements and reporting forms. The numbering of reporting forms shown under each component below corresponds to that of the Appended Forms of the Ministerial Ordinance. The English title of the Ministerial Ordinance and the names of the reporting forms on this page are tentative translations.
1. Reports on payment etc. (Article 55 of the FEFTA)
The payment or receipt of settlement funds (referred to as "payment etc." hereafter) between a resident and a nonresident should be reported if the amount of the payment etc. exceeds the equivalent of 30 million yen. Details of the transaction underlying the payment etc. are reported using the relevant BOP item number, and the transaction is recorded under the corresponding component in the statistics. However, no report is required for a payment etc. directly resulting from the export or import of goods that pass through Japanese customs. For an example of such a reporting form, see (Reference) Form 3: Report on Payment or Receipt of Payment (Tentative Translation) [PDF 61KB], which is used for payments or receipt of payments through banks etc.
- Forms 1-4: Report on Payment or Receipt of Payment (referred to as "Payment Reports" hereafter)
2. Reports on capital transactions (Article 55-3 of the FEFTA)
A capital transaction such as an acquisition or a transfer of securities should be reported by the transactor. The reports primarily used as data sources for the BOP related statistics are as follows.
- Form 13: Report on Acquisition/Transfer of Securities
- Form 21: Report on Issuance/Offering of Securities
3. Reports on matters concerning foreign exchange services (Article 55-7 of the FEFTA)
Financial institutions that hold "special international financial transactions accounts" and other residents engaging in foreign exchange services on a considerable scale are required to submit reports on matters concerning those services. The main reporting forms are as follows.
- Form 14: Report on Sales Contract etc. of Securities
- Form 36: Report on Investment Position in Foreign Currency Securities
- Form 37: Report on Investment Position in Yen-Denominated Foreign Bonds Issued by Nonresidents
- Form 38: Report on Investment Position in Yen-Denominated Securities Issued by Residents
Transaction reports (Form 14) are submitted daily by major financial institutions designated by the Minister of Finance and monthly by other residents. Securities firms submit reports when they conduct intermediation or brokerage for a transaction with a nonresident. Reports on investment positions in securities (Forms 36-38) are submitted annually by investors and custodians. Both transactions and investment positions are reported as aggregated amounts by type of security, not on a security-level basis.
- Form 31: Report on Provision etc. of Loans
- Form 41: Report on Provision etc. of Loans to Nonresidents
- Form 28: Report on Sales of Loan Claims
Banks and insurance companies submit monthly reports on the provision or collection of loans as well as on sales of loan claims.
c. Assets and liabilities positions
- Form 26: Report on Assets and Liabilities Positions
- Form 33: Report on Banks' Claims and Debts Positions vis-a-vis Nonresidents by Country
Banks submit monthly reports on assets and liabilities positions at the end of each month (Form 26). They also submit a report on positions at the end of each quarter by partner economy and currency (Form 33).
d. Financial derivatives
- Form 27: Report on Transactions in Financial Derivatives
Transactions in financial derivatives are reported monthly and positions quarterly.
e. Investment income
- Form 40: Report on Payment or Receipt of Payment of Interest, Dividends, or Fees etc.
- Form 39: Report on Holdings of Discounted Public Bonds and Corporate Bonds
Receipt and payment of investment income as well as of financial and securities service fees etc. are reported monthly (Form 40). Holdings of discounted bonds are reported annually (Form 39).
4. Other reports for the preparation of the statistics (Article 55-9 of the FEFTA)
Residents who meet certain criteria are required to submit the following reports for the preparation of the BOP and IIP. Specifically, in addition to reports based on the following forms prescribed in the Ministerial Ordinance, relevant administrative organs or residents who conduct transactions governed by the FEFTA are required to provide reports on certain matters based on separate notices issued by the Minister of Finance (referred to as "Separate Notices" hereafter). The main reports are as follows.
a. Overseas deposits
- Form 54: Report on Overseas Deposits Outstanding
Residents whose balance of deposits with nonresidents at the end of any month exceeds the equivalent of 100 million yen submit this form for the relevant month.
- Forms 45 and 46: Report on Revenue and Expenditure of International Air Transport Operations
- Forms 47 and 48: Report on Revenue and Expenditure of Sea Transport Operations
Airline or shipping companies engaged in international transport operations submit monthly reports on fare and freight charges, operational costs, etc.
c. Cargo insurance
- Form 49: Report on Insurance for Exports, Imports, etc. of Cargo
Non-life insurance companies engaged in insurance business covering exports, imports, and/or transport of cargo between foreign economies submit monthly reports on insurance premium, claims, and the operating expense ratio.
d. Direct investment
- Form 51: Report on Retained Earnings etc. of Foreign Corporations
- Form 52: Report on Retained Earnings etc. of Companies in Japan
Residents who own equity providing 10 percent or more of voting power in nonresidents and residents in which nonresidents own equity providing 10 percent or more of voting power submit an annual report on their investment position at fiscal year-end and on their retained earnings for the year. Investment in a foreign subsidiary (Form 51) should be reported if the amount of equity investment of the resident (investor) is 1 billion yen or more. Investment from a foreign parent company (Form 52) should be reported if the amount of stated capital of the resident (subsidiary) is 1 billion yen or more.
e. Trade credit
- Survey on Trade Credit (Separate Notices)
Companies engaging in exports and imports submit quarterly reports on trade credit transactions and positions.
f. Small remittances of individuals
- Survey on Personal Transfers (Separate Notices)
Banks and funds transfer service providers submit monthly reports on small remittances between family members and other personal transfers of small amounts that are not covered by the Payment Reports.
B. Other Data Sources
Data compiled by other agencies are also used for compiling the BOP related statistics. For example, the "Trade Statistics of Japan" (Ministry of Finance) are used for "goods," and the "Immigration Control Statistics" (Ministry of Justice) and the "International Visitor Survey" (Japan Tourism Agency) are used for "travel."
V. Methodologies by Item
Major types of transactions included in each component and main sources for the component are described in the tables below (the numbers shown under the main sources correspond to the numbering of the Appended Forms of the Ministerial Ordinance). For details, see Japan's Balance of Payments Related Statistics: Methodologies by Item [PDF 640KB].
|Major types of transactions
|Exports/imports of goods and intermediary trade (i.e., merchanting).
|Travel, transport, charges for the use of intellectual property, and other service transactions related to business activities.
|Receipts/payments of dividends paid out of earnings and interest on bonds.
|Receipts/payments of insurance premiums/claims and compensation for damages, as well as contributions to international organizations.
|Debt forgiveness and transfer of assets through inheritances.
|Major types of transactions
|Investments for the acquisition of firms and establishment of subsidiaries, as well as withdrawals (when a resident owns equity that gives 10 percent or more of voting power in a nonresident and vice versa).
|Sales/purchases of equity as well as sales/purchases and issuances/ redemptions of debt securities.
|Financial derivatives (other than reserves)
|Receipts/payments of forward trading gains/losses and notional exchange gains/losses on currency swaps.
|Loans, deposits, accounts receivable/payable resulting from the time difference between the contract date and settlement of securities.
|Changes in foreign currencies resulting from foreign exchange interventions and increases due to receipts of income.
Balance of Payments Statistics Group, Balance of Payments Division, International Department
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