In recent years, Japan has been experiencing unprecedented current account surpluses, a trend that is being predicted as likely to continue in the next few years. Japan`s response is three-pronged: expansion of domestic demand, improvement of access to their market and recycling external surpluses to the developing countries through various means such as the accelerated disbursement of official development assistance targets. This study is concerned with the last response, with an emphasis on Japan`s aid to the ASEAN. It also looks into the major challenges which Japan`s ODA must face at present and in the future.
