- The Japanese Yen was already giving back some ground to the US Dollar
- That process continued but did not accelerate notably after some weaker trade data
- The breakdown showed no obvious weakness, but exports came in below elevated expectations
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The Japanese Yen continued to slip against the US Dollar Monday following news of a surprise trade deficit in May.
That said the data breakdown was more positive. Imports increased by a chunky 17.8% annualized, while exports slightly underwhelmed. They rose by 14.9% where a gain of about 16% had been expected.
Still, this is hardly an export collapse. Indeed exports to all of Japan’s major client areas were up quite strongly. Those to China rose 23.9%, to the European Union 19.8% and to the US 11.6%.
The numbers won’t have any impact on the prognosis that ultra-loose Japanese monetary policy will be with us for a good while yet, a prognosis underscored somewhat by Bank of Kapan Governor Kuroda’s disinclination to discuss any exit from it when he met the press last week.
Sure enough, currency impact was minimal. USD/JPY continued to inch higher in the wake of the data, but it had been drifting upward in any event.
--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter:@DavidCottleFX