Japan’s external trade deficit keeps breaking records. According t the recent report published by the Japanese Department of Trade, the deficit increased by to $17.38bn in January.
The deficit is growing mainly because a 7.3% import increase (y/y). It is not offset by higher export (+6.4%).
The export turnover between Japan and the USA/Asia is gradually growing. Analysts say that exporters’ success is backed by the easing of the territorial disputes between Japan and China. At the same time, the export to European countries is still declining as the continued eurozone crisis affects the region’s domestic consumption.
At the same time, Japan has been boosting the import of energy carries since it had to abandon nuclear energy after the Fukishima-1 meltdown.
Analysts say that the Japanese external trade stats look controversial. On the one hand, the export growth shows that the BOJ’s policies are successful. On the other hand, a cheaper yen increases the cost of imported energy carrier.
Forex.
The chart below, courtesy of , reflects the current state of affairs in the market of USDJPY. The currency pair is rallying.
A break below 94.40 will give way to 96.06. The current bullish move will be completed as soon as the price overcomes the bottom of the MF sloping channel and consolidates below90.78 (as shown below).
