How big are the risks from a deteriorating current account?

Japan’s current account surplus has fallen sharply in recent years, as the trade balance has moved deeply into the red. The current account balance is more likely to rebound into surplus than slip into sustained deficit in the years ahead, so private sector savings should remain sufficient to finance public sector deficits. However, there is no guarantee that domestic investors will continue buying JBGs at current low interest rates if inflation takes off and the BoJ ends QQE.