Another disappointment for BOJ – weaker current account surplus

Weaker Yen had its days and as of now it's simply losing its charm. Japan had a major Yen advantage, when Bank of Japan introduced record monetary easing back in 2012, however over the years as other central banks' ease policy especially European Central Bank (ECB) and Emerging market currencies dropped.

China and emerging market weakness coupled with lost charm of Yen took its toll on Japan's current account surplus, which dropped more than expected in September. Especially in September report, profits from investment abroad dwindled.

• Current account surplus for September was just ¥1.468 trillion or $11.9 billion, down 11% from last month. Median expectation was for surplus to widen by 30% to ¥ 2.15 trillion. Surplus was smallest since June.
• In recent months, primary income has been major source of current account surplus, which dropped from ¥2.05 trillion in August to ¥1.67 trillion in September.
• Goods and services recorded surplus but way small at ¥ 37.1 billion.

However broadly speaking, Yen may have lost some of its charm but hasn't lost completely. Surplus was 15th at a stretch and it's still up 50% from a year ago.

Bank of Japan (BOJ) is likely to expand policy further but currently take a more wait and watch approach looking to FED and ECB in December.

Yen is currently trading at 123.2 against Dollar.