Japanese Yen Strength Has Crippled Trade, as Exports Plunged 26.7% in November

The Japanese yen slipped lower on Sunday and Monday following news that Japan’s exports plunged at a record annual pace in November. A further breakdown shows that exports to Asia fell by the most since 1986 due to the combination of a rapid appreciation in the Japanese yen along with slowing global growth. Furthermore, the trade balance fell negative for the second straight month for the first time since 1980, as a 14.4 percent drop in imports was offset by a 26.7 percent decline in exports. According to the Bank of Japan’s Monthly Report for December, the central bank is highly concerned about these developments, and if the Japanese yen continues to strengthen, there is little doubt the government will step in to intervene in the currency markets.