Japanese Trade data Signals Solid Growth

The Japanese yen weakened against the US dollar, as the USD/JPY Forex market moved higher. Japanese official trade data, released this morning, was rather encouraging, even though it was a broad miss.

Japanese exports were higher for a fifth consecutive month in April. Its 7.5 percent annual rise was a little less than markets had hoped for. Imports surged 15.1 percent. This was a lot better than the 14.8 percent expected. This means that there was an overall trade balance of ¥481.7 billion ($4.3 billion).

What does this mean, firstly it should remove some pressure of Japan and, secondly, it should make it more difficult for US President Donald Trump to criticize Japanese trade practices. Trump is hawkish about countries which run persistent trade surpluses with the United States. Japan is among the “main offenders,” according to Trump. However, he has been much less since winning the election.

Japanese Data signals Expansion

Japan is a global bellwether of economic trade. This Japanese data indicates satisfactory expansion. These trade numbers, are also in line with other data from around the region. Especially when you look at China and Australia. When the global economy is more robust, Forex traders tend to look towards higher yielding currency pairs. This means that low yielding currencies like the yen will take a hit after data such as this.

It would also seem that many currency traders are more focused on geopolitical issues in the US as well as President Trump’s first trip overseas.