Free Trial

Larger FX Option Pipeline


Ending QE Early Would Be Hawkish... Right?

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access
MNI (London)
--Japan December Exports Fall 3.8% Y/Y After 0.1% Gain In November
     TOKYO (MNI) - Bank of Japan officials are now more vigilant in their
outlook for exports, somewhat discouraged by the weaker-than-expected December
data, having expected to see a steady pick-up from November.
     However, the BOJ board will likely maintain the view that exports have been
on an increasing trend at the two-day policy-setting meeting that ends later
Wednesday, as they focused on underlying trends as Q4 exports rebounded from
their Q3 dip.
     Japan's exports fell 3.8% on year in December, the first drop in three
months following 0.1% gain in November.
     The decrease was led by slower exports of chip-making equipment,
semiconductors and telecommunication equipment.
     Of note, Japan's exports to China fell 7.0% on year in December on the back
of its slowing economy, the first drop in three months and after a 0.4% in
November. China's economy has slowed as the trade dispute with the U.S. weighs
and domestic demand dips, BOJ officials view.
     Those officials don't expect China's economy to worsen sharply from here,
as Beijing steps up preventative measures.
     BOJ officials are worried about the slower exports of chip-making equipment
(-22.4% in Dec. vs. -18.9% in Nov.) and telecommunication equipment (-44.7% in
Dec. vs. -45.2% in Nov.).
     They think Japan's exports in the fourth quarter haven't offset the
temporary drop in Q3, with the trend not recovered to the level seen in Q2.
     Looking ahead, Japan's exports are expected to rise this month, boosted
ahead of the Chinese New Year in February -- with exports then likely to drop
over the China holiday period, making it difficult for BOJ economists to examine
the underlying trend.
     The next key piece of data is the BOJ's real trade indexes for December,
due Wednesday at 1400 JST (0500 GMT), with Bank officials now closely watching
whether Japan's real export index in the fourth quarter has recovered to the
uptrend seen before the Q3 drop.
     The real export index posted the first m/m drop in two months in November,
down 2.9% following a 6.3% rise in October. The real export index for the third
quarter fell 1.9% q/q, the first drop since the first quarter of 2016.
--MNI Tokyo Bureau; tel: +81 90-2175-0040; email:
--MNI London Bureau; tel: +44 203-586-2225; email:
MNI London Bureau | +44 203-865-3812 |
MNI London Bureau | +44 203-865-3812 |
Sign up now for free access to this content.

Please enter your details below and select your areas of interest.