THE TAKEAWAY: Japan’s trade balance disappoints > Economic struggles continue to bolster aggressive monetary policy > Yen outlook Bearish
Japan’s Trade Balance for December came in worse than expected at -¥567.6B in part due to a lower than expected Current Account Total of ¥98.1B. The trade balance slightly missed estimates of -¥560.6B, but was significantly higher than November’s trade balance of -¥847.5B. The Yen retreated following the report with the USD/JPY jumping from 93.625 to 93.691 immediately following the data release.
This most recent report may only add fire to the aggressive monetary policies of Japan’s current government, which has looked towards currency depreciation in the hopes of inducing economic growth. Given Prime Minister Abe’s monetary easing commitment, it will likely take significant positive economic data in order to ease Japan away from the money printing pedal. As a result, while fluctuating economic data may continue to put negative or positive short-term pressure on the Yen, the currency is likely to depreciate against its peers in the long run.
USD/JPY (2 day)
Chart created usingMarket Scope– Prepared byJason Shemtob
