TOKYO -- Investment and services are playing an increasingly large role in fueling Japan's growth, a shift from the model that long relied on exports of cars, appliances and other goods to drive the economy.
According to the Ministry of Finance's balance of payments statistics for fiscal 2014, released Wednesday, Japan's travel balance moved into the black for the first time since fiscal 1959 thanks to robust spending by foreign visitors.
Meanwhile, an increase in overseas mergers and acquisitions by Japanese companies pushed up the country's investment earnings to a record high.
The travel balance, calculated by subtracting how much Japanese spend overseas from the amount foreign visitors shell out in Japan, achieved a surplus of 209.9 billion yen ($1.75 billion) in fiscal 2014, a sharp reversal from the deficit of 530.4 billion yen the previous year.
Behind the rosy figures is a surge in the number of foreign visitors, which hit a record 14.6 million in fiscal 2014. That jump helped Japan rake in a record 2.23 trillion yen from travel in the balance of payments.
The foreign visitor count temporarily dropped due to the collapse of the Lehman Brothers investment bank in 2008 and the earthquake and tsunami disasters in northeast Japan in March 2011. But in recent years, it has consistently increased.
An official of the Japan National Tourism Organization said the uptrend is being "boosted by the weaker yen and the government's easing of visa requirements for travelers from Southeast Asian countries," as well as by the fact that Japan's Asian neighbors have been enjoying unprecedented economic growth.
A survey by the organization shows that in fiscal 1959, the last time Japan's travel balance was in black, some 182,000 tourists visited Japan and about 57,000 Japanese tourists went abroad. But as Japan's economy grew, more and more Japanese traveled overseas, pushing the travel balance into the red.
The number of Japanese traveling abroad continued to rise after 1964, when Japan was at the height of its postwar boom -- marked by the country's hosting of the Summer Olympics and the launch of the Tokaido Shinkansen line. But the number has been flat since the 2000s.
In fiscal 2014, Japanese travelers spent 2.02 trillion yen abroad, down 4% on the year. Partly responsible for that slide was the yen's depreciation from 103 level against the dollar to 120 level that year, making overseas travel significantly more expensive.
Eyeing foreign shores
Japan's current-account surplus stood at 7.81 trillion yen in fiscal 2014, the first increase in four years.
The improvement was due in part to active overseas investment by Japanese companies. Their investment returns climbed 10.5% on the year to 19.2 trillion yen, the biggest figure since fiscal 1996, when comparable data became available.
As for the trade balance, which has been in the red since fiscal 2011, the deficit shrank but did not climb into the black.
Investment income rose for the sixth straight year. Direct investment returns, including dividends and interest from overseas subsidiaries, were particularly high, at 7.15 trillion yen, up 21.3% on the year.
Japanese companies are on an overseas expansion drive. According to Recof, a Tokyo-based consultancy specializing in mergers and acquisitions, fiscal 2014 saw many big deals. Examples include the joint investment of $10 billion by Japanese trading house Itochu and Thai conglomerate Charoen Pokphand Group in a unit of China's largest state-run conglomerate.
There has also been a jump in cases where Japanese domestic demand-driven companies are looking abroad for new opportunities.