While most analysts projected sustained growth for the Japanese export economy, trade encountered headwinds during January after exports grew by a meager 1.30% compared to the consensus estimate of 4.70% expansion. This contrasts sharply with the 5.40% annualized pace of increase in December while growth in trade came from the import side of the equation.
During the same annualized period, imports rose by 8.50%, surging beyond projections of 4.70% and well above the -2.60% contraction reported a month earlier. Import growth outpacing the rise in exports brought the trade deficit to JPY -1.087 trillion for the period, marking the lowest point in the figure in 24-months. However, import growth is positive and may be a strong catalyst for inflation gains in the coming months if the trend persists. After sliding on Friday, USDJPY is back on the climb following the data.
Japanese Trade Deficit At Highest Point in 2-Years
Daily Analysis - 20/02/2017