I rarely see long-term Japan's international balance of payments

In Japan, the balance of saving and investment, as well as the current account balance, has transformed significantly when viewed over the long term.

Current account balancehas existed only since 1996, so you are unlikely to see a long-term chart like the following.

When I took the junior high school entrance exam, I was taught in social studies that Japan was a trade deficit country. When I joined a company and moved to the Securities Department, it was a great trade surplus country, and then the Plaza Accord occurred.

The main sources of the surplus were automobiles and electrical appliances. Eventually, electrical appliances were replaced by China and Southeast Asia, and now what supports Japan’s trade balance is almost solely automobiles. (Of course, that is not everything. Chemicals, etc., are also doing well.)

To summarize the current international balance of payments,

(1) Exports of automobiles and imports of crude oil, etc., are balanced, so when crude oil prices rise, there is a trade deficit, and when prices fall, a trade surplus occurs. The turning point is a Brent crude price of $60.

(2) The income balance from foreign assets is large, the current account balance is in the black, but outward direct investment is expanding, and the basic balance is almost zero.

The relationship between the trade balance and the exchange rate will be discussed in a separate article, but

a trade surplus implies that domestic production is larger than imports, which increases domestic jobs, raises wages, and leads to economic growth.

As the trade surplus expands, the yen tends to strengthen with a delay, and the trade surplus then shrinks. When the trade surplus shrinks, dollar selling decreases, so the dollar strengthens (yen weakens). Within this, price adjustments also occurred.

However, now it is different. There is no such cycle. Japanese companies, disliking the impact of exchange rates on their performance (production volumes), have expanded overseas (set up bases abroad and produce overseas). As a result, the relationship between exchange rates, trade balance, and domestic-foreign price differences has weakened.

So, Japan’s trade deficit = increase in imports = increase in the amount of crude oil imports, but did the increase in imports lead to more domestic supply of goods? No, it did not.
The volume of oil imports has not changed. The price per unit rose, so the import value increased. Increased imports did not make us richer.

From the household perspective, gasoline prices rose. Despite no change in gasoline consumption, expenditure increased. The same applies to electricity and gas bills. And because of that, spending on other goods is being squeezed. In short, people are becoming poorer.

How can we become wealthier, how can we achieve economic growth?
It will become lengthy, so that part is omitted. Moreover, there are many possible views on the matter.