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Germany PMIs improve, but points to economic contraction in current quarter

    By
    ActionForex.com
    -

    While Germany witnessed a modest improvement in its economic indicators for September, underlying concerns persist. PMI Manufacturing saw a slight climb from 39.1 to 39.8. Similarly, PMI Services edged up from 47.3 to just below the 50 mark at 49.8. Composite PMI experienced an uptick, moving from 44.6 to 46.2.

    Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, addressed the improvements, particularly noting, “The German services PMI stopped its slump and nudged up near 50 in September.” Nonetheless, despite this upward nudge, the service sector remains virtually unchanged following the dip seen in August.

    Encouragingly, recent PMI data suggests a deceleration in the decline of new orders and a slowdown in the reduction of purchasing activity in manufacturing. However, a closer look into the data indicates that manufacturing production might experience a drop surpassing 2 percent compared to the preceding quarter.

    The broader picture is not particularly optimistic. “Germany has entered once again into contraction during the current quarter.” Hamburg Commercial Bank’s latest projections anticipate a sharp GDP decline of 1 percent relative to the prior quarter.

    Full Germany PMI release here.

    France PMI composite fell to 43.6, 40-mth low

      By
      ActionForex.com
      -

      France’s economic indicators have signaled alarming trends as the country’s PMI Manufacturing slumped to 43.6 in September, marking a 40-month low. PMI Services and Composite figures too painted a grim picture, both plummeting to a 34-month low, with values of 43.9 and 43.5, respectively.

      Norman Liebke of Hamburg Commercial Bank expressed concerns regarding the sharp dip in business activity across the service and manufacturing sectors. Liebke’s outlook for 2024 suggests an economic growth rate lower than earlier projections. This bleak forecast is mirrored by the manufacturing sector’s sentiment, which has turned notably pessimistic. Manufacturers harbor “growth expectations [that] fell to their lowest since May 2020.”

      For the current quarter, Liebke’s predictions are hardly optimistic. He said, “Economic growth for this quarter… points to growth of just 0.2%.” Interestingly, he notes that any slight growth will predominantly be propelled by the public service sector, with the private service sector anticipated to contract, reflecting the PMI data.

      Furthermore, the decline in unemployment witnessed recently is expected to be short-lived, with rates likely to surge in the upcoming months. On the inflation front, rising input costs and output charges remain a concern. Liebke anticipates a surge in inflation, predicting it “to have risen further in September to a rate of 5.5%” before it begins to taper off.

      Full France PMI release here.

      UK sales volume up 0.4% mom, sales value up 0.8% mom

        By
        ActionForex.com
        -

        UK retail sales showed some growth in August, albeit falling short of market expectations. On a month-on-month basis, sales volumes increased by 0.4% mom, slightly under the anticipated 0.5% rise. When removing the impact of fuel, the volume rose by a slightly better 0.6% mom. In terms of the monetary value, sales were up 0.8% mom, with the figures excluding fuel at 0.7% mom.

        Taking a step back to analyze a broader timeframe, the three-month period leading up to August 2023 witnessed a 0.3% rise in sales volumes compared to the previous three months. Same growth of 0.3% was observed for volumes that excluded auto sales. In value terms, the increase was more pronounced with a 1.3% growth, and the value excluding fuel sales experienced an even more robust growth of 2.0%.

        Full UK retail sales release here.

        Japan’s PMI manufacturing fell to 48.6, slackening demand and lower employment

          By
          ActionForex.com
          -

          Japan’s Manufacturing PMI further declined from 49.6 to 48.6 in September, falling short of the anticipated 49.9, marking the most pronounced contraction since February. PMI Services also receded from 54.3 to 53.3. PMI Composite, which gives a holistic view of the broader economy, tapered off from 52.6 to 51.8.

          Usamah Bhatti, an Economist at S&P Global Market Intelligence, noted that the future doesn’t seem particularly rosy, with forward-looking indicators hinting at a possible slackening of demand and activity. While service firms did experience a rise, manufacturing segment reported a sharp decline in new orders, the most pronounced in seven months.

          Another worrisome development is the reduced employment levels in the privatgesector. Bhatti stated, “As pressure on capacity eased, there was a renewed reduction in employment levels.” This trend was “the first since the start of the year and the quickest since August 2020.” He attributed this to companies not replacing those who voluntarily exited, often as a strategy “amid elevated cost burdens.”

          Full Japan PMI release here.

          Australia PMI composite back to expansion, risk of “no land” for the economy

            By
            ActionForex.com
            -

            In September, Australia’s Manufacturing PMI slipped to a 3-month low, declining from 49.6 to 48.2. In contrast, PMI Services showcased resilience, rising from 47.8 to a 4-month high of 50.5. PMI Composite also surged from 48.0 to 50.2, a 4-month peak, signaling a return to expansion in the broader economy.

            Warren Hogan, Chief Economic Advisor at Judo Bank,said that “demand in the economy is holding up, and business activity remains on a sound footing.” He further remarked that, contrary to some expectations, the present economic scenario isn’t about choosing between a “hard or soft landing.” Instead, he proposed that the real risk is of “no landing” for the economy.

            Hogan further touched upon the inflation concerns that have been a pivotal discussion in financial circles. “The inflation indicators remain elevated at levels pointing to above-target CPI over the next 6-9 months,” he stated. He pointed out that input prices remained unchanged in September, hinting at continued cost pressures. However, the final prices index experienced a slight dip in the September flash report. Despite this marginal decline, Hogan suggested that “inflation over the second half of 2023 could be higher than desired.”

            This latest PMI data follows a trend of stronger-than-predicted figures emerging from Australia in recent weeks. While this demonstrates economic stamina and persisting inflation, all eyes are on RBA’s next steps. Hogan postulates that the RBA Board, under leadership of the new Governor Michele Bullock, will likely adopt a patient stance. However, he doesn’t rule out further monetary tightening, possibly “in early November on Melbourne Cup day,” should the economic indicators not align with RBA’s projections of a slowdown.

            Full Australia PMI release here.

            New Zealand’s trade data sees China dominates decline in exports and imports

              By
              ActionForex.com
              -

              In August, New Zealand observed a dip in both its goods exports and imports compared to the previous year, leading to a monthly trade deficit of NZD -2.3B.

              Compared to figures from August 2022, goods exports saw a reduction of NZD -296m, marking a -5.6% yoy drop, settling at NZD 5.0B. On the other hand, goods imports displayed an even steeper decline, shrinking by NZD -639m or -8.1% yoy, amounting to NZD 7.3B.

              A deeper dive into the export figures revealed China as the major contributor to the monthly dip. Exports to China fell sharply by NZD -262m, representing an -18% yoy decline. Other notable declines were witnessed in exports to Australia, which dipped by NZD -71m (-9.0% yoy), and Japan, with a decrease of NZD -34m (-11% yoy). However, there was some silver lining with US and EU. Exports to the USA grew by NZD 62m, marking a 9.6% yoy increase, and those to the EU surged by NZD 28m, a 7.7% yoy rise.

              China also took the lead in the contraction in imports. Imports from China plummeted by NZD -363m, a stark -19% yoy decline. Other significant reductions in imports were observed from Australia, down by NZD -92m (-9.7% yoy), South Korea with a drop of NZD -74m (-13% yoy), and US decreasing by NZD -36m (-5.4% yoy). In contrast, imports from EU displayed a robust growth, climbing by NZD 120m or 12% yoy.

              Full New Zealand trade balance release here.

              ECB’s Lane: 4% deposit rate can bring inflation back to target within projection horizon

                By
                ActionForex.com
                -

                ECB’s Chief Economist, Philip Lane, offered insights into last week’s rate hike during a speech overnight. He noted that “the choice between holding at 375 and moving to 400 was finely balanced,” referring to the deposit rate. Lane went on to express that opting for an additional hike was a safer decision “at a margin”.

                He believed that 4% deposit rate should be “consistent with a return of inflation to target within the projection horizon.” The condition is that it’s to be ” maintained for a sufficiently long duration”.

                Looking to the future, Lane cautioned about the extended phase of uncertainty that looms regarding the disinflation process. Highlighting the intricacies of the present economic climate, Lane pointed to the “initial inflation shock, the lagged nature of wage adjustment in the euro area, [and] the considerable sectoral rebalancing” as contributors to the prolonged period of inflation uncertainty.

                Full speech of ECB Lane here.

                US initial jobless claims drop to 201k, vs exp 222k

                  By
                  ActionForex.com
                  -

                  US initial jobless claims fell -20k to 201k in the week ending September 16, well below expectation of 222k. Four-week moving average of initial claims dropped -8k to 217k.

                  Continuing claims fell -21k to 1662 in the week ending September 9. Four-week moving average of continuing claims fell-9k to 1687k.

                  Full US jobless claims release here.

                  BoE on hold at 5.25%, heavyweights win tight vote

                    By
                    ActionForex.com
                    -

                    BoE opts to keep its Bank Rate unchanged at 5.25%. The decision, however, came after a razor-thin 5-4 vote that showed divisions within the central bank’s ranks. Notably, the influential figures – Governor Andrew Bailey, Deputies Ben Broadbent and Dave Ramsden, along with Chief Economist Huw Pill, sided with Swait Dhingra in favour of retaining the rate at its current level.

                    In its accompanying statement, BoE underscored the need for a vigilant approach, stating, “Monetary policy will need to be sufficiently restrictive for sufficiently long”. Furthermore, the central bank emphasized its readiness to consider more rate hikes, signaling that “Further tightening in monetary policy would be required if there were evidence of more persistent inflationary pressures.”

                    Amid these cautions, Bank’s staff adjusted their growth outlook, expecting only a slight uptick in GDP for the third quarter of 2023. They also anticipate that the underlying growth for the second half of the year will likely underperform previous expectations.

                    On the inflation front, the bank projected a notable decline in CPI in the near future. Despite recent spikes in oil prices, the central bank expects this drop due to “lower annual energy inflation” and anticipated further reductions in food and core goods prices.

                    Yet, the BoE warned that the services sector could buck this trend, foreseeing that “Services price inflation, however, is projected to remain elevated in the near term, with some potential month-to-month volatility.”

                    Also, in a unanimous decision, the MPC agreed to reduce the stockpile of UK government bond purchases, cutting it down by GBP 100B over the coming year, bringing the total to GBP 658B.

                    Full BoE statement here.

                    ECB’s Nagel uncertain if rate plateau is reached

                      By
                      ActionForex.com
                      -

                      ECB Governing Council, Joachim Nagel, Bundesbank head, posed a crucial question in his speech in Frankfurt, “Have we reached the plateau” on interest rates? He answered by stating that it “cannot yet be clearly predicted”. He continued, elaborating that “the forecasts still only show a slow decline toward the target level of 2%.”

                      Nagel’s comments hinted at the continuous monitoring of economic indicators, suggesting that while borrowing costs are expected to “remain at a sufficiently high level for a sufficiently long time,” the exact interpretation hinges on the incoming data.

                      Addressing concerns about Germany’s economic health, he remarked that characterizing Germany as the ‘sick man’ “seems exaggerated.” He attributed the present sluggish growth to specific influences such as the global economic deceleration, Russia’s conflict with Ukraine, and reduced public expenditure. Offering a silver lining, Nagel projected, “Once we get past the worst of these special factors, the weak growth should also ease. We expect the economy to grow again in 2024.”

                      On the other hand, Latvia’s central bank chief, Martins Kazaks, highlighted the structural nature of recent oil price hikes. He pointed out, “The recent oil price increase in my view is not a temporary or transitory, it’s very much a structural issue.” Such dynamics, according to Kazaks, present heightened inflation risks. Regarding the anticipated rate cuts, he expressed skepticism about their timing, asserting, “I think expecting rate cuts mid next year is somewhat too early.”

                      SNB bucks expectations and keeps interest rate steady

                        By
                        ActionForex.com
                        -

                        In an unexpected move that diverged from the market’s anticipations, SNB held its policy rate steady at 1.75%, side-stepping the anticipated hike to 2.00%. The conditional inflation projections have undergone downward revision. While inflation could surge above 2% target in upcoming quarters, it’s projected to retract back to 1.9% in 2025 based on current interest rate, without further tightening.

                        Despite this, SNB did not completely distance itself from a hawkish tone, and maintained the further tightening “may become necessary”. It also reiterated the willingness to intervene in the market with focus on “selling foreign currency

                        Delving into the specifics of the conditional inflation projections, based on steady 1.75% policy rate, inflation is forecasted to ascend to 2.0% by the end of this year. It will scale up to its apex at 2.2% in the second quarter of 2024, before experiencing a slight dip to 1.9% at the onset of 2025, maintaining that level thereafter.

                        On the economic growth front, SNB’s projections lean towards the cautious side, forecasting tepid growth for the remainder of the year. The annual growth is projected to hover around a modest 1%.

                        BoE and SNB looms as GBP/CHF awaits Clarity

                          By
                          ActionForex.com
                          -

                          Today, all eyes are firmly fixed on BoE and SNB rate decisions, which are poised to offer directional cues for the GBP/CHF, hopefully. The pair has been bounded in a constrained range for some time, hungry for a catalyst to redefine its movement.

                          On one hand, BoE is grappling with the aftermath of lackluster UK inflation data, leaving its imminent rate decision hanging in a delicate balance. The central bank faces two potential paths: embracing a hawkish hold akin to Fed, hence deferring a rate hike while keeping it in the future playbook, or mirroring ECB’s strategy with a dovish hike, signaling a peak in the tightening cycle. This undetermined stance has metamorphosed the rate decision into somewhat of a coin toss.

                          Meanwhile, the consensus among analysts is leaning towards a 25bps hike by SNB, setting the interest rate at a neat 2.00%, thereby drawing the current cycle to a close. This perspective, held by a substantial majority of economists surveyed by Bloomberg, finds reinforcement in the upward revision of the 2024 inflation forecasts tabled by SECO yesterday.

                          Casting an eye on GBP/CHF, it is currently oscillating within a short-term range between 1.1053 and 1.1240. Presently, its trajectory is hard to pin down. The bearish sentiment is palpable with the pair capped below by 55 D EMA at 1.1709. However, this is offset by the steadfast support at 38.2% retracement of 1.0183 to 1.1574 at 1.1043.

                          For a clear bearish momentum to materialize, the cross would need to break the 1.1053 support, and then ensuring it sustainably trades below 1.1043 – a weekly close below this fibonacci level would solidify this stance. Yet, a spike lower, followed a substantial rebound could indicate a bullish reversal, hinting at a potential rise past 1.1240 resistance later, to extend the medium term range trading from 1.1574.

                          New Zealand’s Q2 GDP outperforms expectations with 0.9% qoq growth

                            By
                            ActionForex.com
                            -

                            New Zealand’s GDP surged by 0.90% qoq in Q2, doubling the expected growth rate of 0.4%. This notable growth is significantly attributed to substantial boost in the business services sector, specifically within the realm of computer system design.

                            Despite a setback in the primary industries, which contracted by 1.9%, goods-producing industries and service sectors pulled their weight, recording a growth of 0.7% and 1.0% respectively. The service sector emerged as a strong pillar of economic advancement.

                            The quarter also saw manufacturing sector shake off its lethargy, reversing a trend of decline sustained over five consecutive quarters to contribute positively to the economic pie.

                            Full NZ GDP release here.

                            S&P 500 dips on Fed’s definitive hawkish stance

                              By
                              ActionForex.com
                              -

                              US equities ended their trading session in the red, following a definitive hawkish stance from Fed, even though interest rate was kept unchanged as expected. Fed sent a clear signal that another rate hike is still on the cards this year, and interest rate is going to stay higher for longer. Fed Chair Jerome Powell confirmed in the post meeting press conference, “We’re in a position to proceed carefully in determining the extent of additional policy firming.”

                              The new batch of economic projections divulged a prevailing sentiment among 12 of 19 Fed officials in favor of one more rate hike within this year. Investors were taken by surprise not by the rate hike anticipation but by the foreseeing of lesser rate cuts in 2024, a strategic shift attributed largely to the resilient labor market.

                              Furthermore, the projections hinted at a steeper path for interest rates in the years ahead. Median outlook for federal funds rate was adjusted upwards, settling at 5.1% for 2024, from a prior 4.6%, and 3.9% for 2025, up from 3.4%. This suggests that monetary policy will lean on the tighter side stretching into 2026. A 2.9% funds rate is projected for 2026, marking a divergence from the long-run neutral rate, which remains pegged at 2.5%.

                              More on Fed:

                              Reflecting these developments, S&P 500 took a dip, shedding -0.94% or -41.75 points to conclude at 4402.20. In a technical context, S&P 500’s movements stemming from 4607.07 are perceived a correction pattern. D deeper slide is on the cards to 4335.31 or even lower.

                              However, robust support levels are anticipated around the 38.2% retracement of 3491.58 to 4607.07 at 4180.95. This is expected to limit further losses, at least at first attempt. Meanwhile, a close above 55 D EMA (now at 4438.25) will neutralize the bearish outlook.

                              Fed stands pat, 12 members see one more hike

                                By
                                ActionForex.com
                                -

                                Fed keeps federal funds rate unchanged at 5.25-5.50% as widely expected, by unanimous vote. Tightening bias is maintained as “The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals”.

                                In the new dot plot, 12 of 19 policymakers penciled in one more 25bps rate hike this year to 5.50-5.75%. By

                                In the new median projections,

                                • 2023 GDP growth is revised up to 2.1% (from 1.0%).
                                • 2024 GDP growth is revised up to 1.5% (from 1.1%).
                                • 2025 GDP growth is unchanged at 1.8%.
                                • 2023 unemployment rate is revised down to 3.8% (from 4.1%).
                                • 2024 unemployment rate is revised down to 4.1% (from 4.4%).
                                • 2025 unemployment rate is revised down to 4.1% (from 4.5%).
                                • 2023 PCE inflation is revised up to 2.2% (from 3.2%).
                                • 2024 PCE inflation is unchanged at 2.5%.
                                • 2025 PCE inflation is revised up to 2.2% (from 2.1%).
                                • 2023 core PCE is revised down to 3.7% (from 3.9%).
                                • 2024 core PCE is unchanged at 2.6%.
                                • 2025 PCE is revised up to 2.3% (from 2.2%).
                                • 2023 federal funds rate unchanged at 5.6%.
                                • 2024 federal funds rate raised to 5.1% (from 4.6%).
                                • 2025 federal funds rate raised to 3.9% (from 3.4%).


                                Full FOMC statement here.

                                Full Summary of Economic Projections here.

                                 

                                Swiss SECO downgrades 2024 growth forecast, raises inflation

                                  By
                                  ActionForex.com
                                  -

                                  In the update to Swiss State Secretariat for Economic Affairs economic forecasts, a marginal upgrade has been bestowed upon Switzerland’s 2023 GDP outlook, leveraging the robust performance in the first quarter. The forecast, adjusted for sporting events, now stands at 1.3%, a slight increase from the 1.1% predicted in June.

                                  Despite this adjustment, outlook for 2024 has experienced a cut, settling at 1.2% as opposed to the earlier estimation of 1.5%. This renders the prospects for economic growth considerably below-average for both 2023 and 2024.

                                  Shifting focus to CPI forecasts, the estimation for 2023 have been marginally trimmed down to 2.2%, a -0.1% decrease from June forecast. Conversely, 2024 projection experiences a hike, ascending from 1.5% to 1.9%.

                                  SECO points towards substantial economic risks looming on the horizon. A pressing concern is the international persistence of inflation. The panorama of economic challenges also encompasses escalating risks tied to the global debt scenario fluctuations in property and financial markets. Monetary policy transmission could also be stronger than assumed.

                                  Furthermore, the evolving situations in Germany and China emerge as potent risk factors, not just for the global economy but significantly impacting Swiss foreign trade.

                                  Full SECO release here.

                                  UK CPI slowed to 6.7%, BoE’s hike tomorrow could be the last

                                    By
                                    ActionForex.com
                                    -

                                    Sterling is facing headwinds after release of UK’s CPI inflation data, which came in lower than market forecasts. This development strengthens the speculation that BoE might be drawing curtains on its tightening cycle, with the one more hike expected tomorrow potentially being the concluding move.

                                    The reported data illustrated deceleration in CPI from of 6.8% yoy to 6.7% yoy in August, a result that fell short of the projected escalation to 7.1% yoy. This is the lowest rate witnessed since February 2022.

                                    A deeper dive into the components reveals that this softening of annual CPI into August 2023 emerged from six out of the 12 sectors. Notably, restaurants and hotels, along with food and non-alcoholic beverages, played a pivotal role in pulling down the numbers. However, the motor fuels category within the transport sector exerted upward pressure, somewhat counterbalancing the decline.

                                    Furthermore, core CPI, which is calculated by excluding variables such as energy, food, alcohol, and tobacco, followed suit, decelerating from 6.9% yoy to 6.2% yoy. This stands significantly below anticipated rate of 6.8% yoy.

                                    Breaking it down further, while CPI goods noted a slight acceleration from 6.1% yoy to 6.3% yoy, CPI services delineated a slowdown from 7.4% yoy to 6.8% yoy.

                                    For the month. CPI rose 0.3% mom in August, below expectation of 0.7% mom.

                                    Full UK CPI release here.

                                     

                                    US treasury yields hit 16-Year peaks as markets await Fed’s insights

                                      By
                                      ActionForex.com
                                      -

                                      As anticipation builds around Fed impending monetary policy decision today, US 5- and 10-year Treasury yields surged to levels not seen in 16 years. With market expectations firming around a hold in the range of 5.25-5.50% – a forecast that has been in place for over a month – the possibility of any shock moves by the Fed is remote.

                                      Nevertheless, investors will keenly dissect any subtle hints from Fed that might suggest another rate hike this year, or provide clues about the timing and speed of monetary easing in 2024. The forthcoming “dot plot” will be of particular significance.

                                      To recall, in their June meeting, 12 out of 18 policymakers envisioned at least one more rate hike in the calendar year. 10 anticipated interest rates to fall back to 4.50-4.75% by the close of 2024. The evolving position of these dots is bound to sculpt market sentiments for the forthcoming months.

                                      Five-year yield exhibited a strong close overnight, at an unmatched zenith since 2007, recording a 4.521. This surge found an ally in the WTI crude oil, which leaped, touching the 93-mark.

                                      On the technical front, FVX looks ready to resume is long term up trend to finally get rid of resistance zone at around 4.5. The next hurdle is 38.2% projection of 3.205 to 4.495 from 4.165 at 4.657.

                                      Any upside surprises in today’s Fed inflation projections could potentially steer FVX towards the 4.657 projection level. Yet, surpassing this level might necessitate a sustained WTI oil rally, breaking the 95 mark and advancing towards 100.

                                       

                                      Australia Westpac leading index edged up to -0.5%, growth struggles despite population boom

                                        By
                                        ActionForex.com
                                        -

                                        Westpac Leading Index for Australia indicates that the nation’s growth outlook remains subdued. The index inched up marginally from -0.56% to -0.50% in August, marking a year since it began registering negative readings. These figures suggest that the prospect of per capita GDP advancing in the coming 3–9 months appears bleak.

                                        Westpac’s forecasts for the next year resonate with the index’s gloomy narrative, anticipating an economic growth of less than 1% for the year leading up to June 2024. Interestingly, there’s a potential silver lining: with predictions pointing to population growth surpassing 2% in 2023, this could introduce some upside risks to the otherwise somber economic projections.

                                        However, despite this population surge, the economy is projected to trail behind, as evident from the March and June quarter results. Both quarters witnessed a contraction of -0.3% in GDP per capita, a pattern that’s predicted to persist in the forthcoming year.

                                        Regarding next RBA rate decision on October 3, Westpac said it’s “almost certain to hold rates steady for another month”. The crucial data for the next move would be September quarter inflation report, which will not be available until the November RBA meeting.

                                        Full Australia Westpac Leading Index release here.

                                        Japan’s exports to China tumble further, trade with US flourishes

                                          By
                                          ActionForex.com
                                          -

                                          Japan’s economic data shows a dwindling momentum in the country’s export sector, registering a decline of -0.8% yoy to JPY 7994B in August, with a particularly notable decrease in its trading activities with China.

                                          The continued dip in exports is largely attributed to diminishing overseas demand and the trade restrictions imposed by China, which have significantly impacted Japan’s trade balance.

                                          A striking example is seen in the sharp -11.0% yoy decline in exports to China, to a total of JPY 1.44T. This downturn marks the third consecutive month of double-digit drops in export activities to China, severely affected by the -41.2% yoy plunge in food exports due to China’s ban on Japanese seafood.

                                          However, a beacon of positivity trading rapport with US, which saw a growth spurt of 5.1% yoy, aggregating to a record JPY 1.62T for the month of August. This surge has been primarily fueled by a heightened demand for Japanese cars, mining, and construction machinery.

                                          On the import front, Japan noted a considerable -17.8% yoy reduction to JPY 8925B, with imports from China dipping -12.1% to JPY 1.93T, and those from US falling -9.5% yoy to JPY 967.39B. The nation’s trade balance has consequently been reported at a deficit of JPY -930.5B.

                                          When analyzed in seasonally adjusted terms, both exports and imports showcase a month-on-month decrease, registering -1.7% mom to JPY 8267.8B and -2.1% mom to JPY 8823.6B, respectively. Thankfully, there is a silver lining as the trade deficit has slightly narrowed compared to the previous month, standing at JPY -555.7B.

                                          Full Japan trade release here.

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