After a disappointing deficit reported a month earlier, Japanese trade managed to swing back into surplus territory during the month of February. The figure was bolstered primarily by the leap in exports, with the figure climbing by 11.30% during February following a 28.20% increase in trade with China. However, import growth decelerating to 1.20% has raised some concerns about reaching the inflation target. BoJ Govenror Haruhiko reminded markets that the Central Bank would maintain quantitative easing and yield targeting to help inflation return to 2.00%. Moving away from Japan, the next major event was the Republican failure to pass measures related to US healthcare, sending stocks lower for the week. Apart from the political firestorm, US fundamentals remained mixed.
New home sales rose to a 592,000 annualized pace as the supply of new homes for sales continues to dwindle. However, existing home sales fell to 5.48 million versus 5.69 million a month earlier as the National Association of Realtors warns about median prices becoming unaffordable. Although durable goods orders came in positive, business sentiment and activity remains clouded by lacking clarity on the fiscal policy outlook. To cap off the week, UK core inflation managed to reach the 2.00% target, with headline inflation rising to 2.30% in February.