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According to the analysts at ING Bank, “Japan’s worsening export growth is largely illusory  and growth rates should soon start to improve.”

Key Quotes:

“The JPY is a little weaker on these trade figures, with their accompanying smaller than expected trade surplus (JPY17.3bn) and the adjusted balance swinging into a small deficit (-JPY34.7bn). The import growth figures at -14.8%YoY down from -1.5% in September also suggest terribly weak domestic demand, whereas in JPY, they were also up slightly (JPY6560 vs 6491bn) and suggest nothing out of the ordinary occurring.

The import growth figures for December will likely outpace those of exports in returning to positive annual growth, even if nothing, in reality, is really changing.

What these figures do hint at, is a broad moderation in the cyclical damage caused by the tech slump, together with no further general deterioration stemming from the ongoing trade war.

The JPY has been a beneficiary of these global risk events, and if these  negative forces are now ebbing, the JPY may see its support beginning to fade, even as its local fundamentals start to improve.”