Rather than harming the domestic manufacturing sector, outward investment by Japanese firms has boosted domestic activity and exports. Accordingly, the growth of offshore investment should not be blamed for the widening of Japan’s trade deficit. Our analysis reinforces the view that the current account is more likely to rebound into surplus than slip into sustained deficit in the years ahead.
Subscriber content
Read this in full, free
Start a free trial and use one of your 10 free starter credits to unlock this piece.