The balance of payments statistics regarding service transactions in Japan shows an increase in both receipts and payments, reflecting the globalization of service trade. Analyzing the breakdown by transaction characteristics, service receipts and payments related to the movement of goods and production activities have undergone changes aligned with the global restructuring of manufacturing processes. On the other hand, service receipts and payments associated with the movement of people and on-site consumption have been predominantly positive, driven by inbound demand.
Conversely, service receipts and payments linked to digital, financial, and insurance sectors have resulted in an expanded deficit due to increased payments to foreign companies resulting from advancements in digitization and the rise of insurance products utilizing reinsurance. Consequently, this has contributed to an overall deficit in Japan’s service balance.
Looking ahead, it is anticipated that as inbound demand continues to rise, the surplus in service receipts and payments linked to the movement of people will expand. Additionally, as Japanese companies strengthen their earning capacity, especially in areas such as the digital sector, globalization is expected to further progress.