The current account surplus may have been indicative of “imbalances”, but does not provide sufficiently granular information to make an effective assessment. The emergence of unsustainable imbalances seems to be better and more clearly captured through other indicators such as large jumps in asset prices and the rapid expansion in corporate sector debt (Charts 4 and 5).
Japan’s continuously large current account surplus itself did not provide clear hints with regard to the bubbles that turned out to be the root cause of serious damage to economic stability.