Details of the balance-of-payments figures, released yesterday by the Ministry of Finance, also showed that Japanese investment abroad had begun to rise even before the recent announcement of measures to encourage it.
Encouraged by the strength of the yen, 14.3 per cent more Japanese went abroad in June than a year earlier, as a glance around the tourist spots of a weak-currency country like Britain would suggest. Japan's monthly deficit on travel increased to $2.8bn, as the yen's value against a range of other currencies rose by nearly 20 per cent compared with the start of the year.
The soaring exchange rate, which cut yen import prices, also partly explains why imports of consumer goods have risen this year. "Deregulation of Japanese markets is finally allowing consumers to buy cheaper foreign goods," said Nick Stamenkovic, an economist at DKB Securities in London.
Economists agreed with the MoF, which said the Japanese surplus was finally on a downward trend. In dollar terms Japan's current-account surplus was $10.94bn in June, down from $11.14bn a year earlier. The yen's rise has disguised the extent of the swing by making exports dearer and imports cheaper in dollar terms - the 'J-curve' effect. The surplus fell from 1,140bn to 924bn in local-currency terms.
The balance of trade in visible goods has also shrunk in yen terms but was slightly higher in dollars: $14bn compared with $13bn a year earlier.
Net purchases of foreign bonds by Japanese investors reached a record of $20.2bn in June. Euroyen bonds accounted for more than half this amount. Net purchases of bonds and shares combined increased in seven out of nine main overseas markets in the first half of this year compared with the same period in 1994.
The most dramatic increase came in purchases of US securities, which rose from a total of $1.36bn to $18.44bn. Japanese purchases of British stocks and shares climbed from $9.46bn to $12.14bn, the MoF said.
"Investors are tentatively pushing into overseas markets," said Mr Stamenkovic, "but there will be nothing dramatic until the domestic stock market stabilises." Today's $18bn US Treasury bond auction will give an indication of Japan's enthusiasm for foreign assets.
On 2 August the MoF introduced a package of measures designed to increase investment abroad by both institutional investors and government agencies in order to counter the yen's strength. The dollar has risen from 88 to above 91 as a result, but many analysts expect the shift in investment patterns to be cautious, given the scale of funds' past losses on overseas investment.