On the contrary to the U.S., Japan has felt continuous current account surpluses. What could be the foremost causes for these surpluses? Is it desirable to have continuous current account surpluses?
Japan's continuous present account surpluses may have reflected a weak yen & high competitiveness of Japanese industries. Massive capital exports through Japan prevented yen from appreciating more than it did. At the means time, foreigners' exports to Japan were hampered through closed nature of Japanese markets. Continuous present account surpluses disrupt free trade by promoting protectionist sentiment in deficit country. This is not desirable especially while it is brought regarding by the mercantilist policies.