Japan logs October trade surplus
JAPAN saw its second consecutive trade surplus in October, official data showed yesterday, though it came in below expectations as a strong yen dented exports.
While the yen has tumbled in November on the back of Donald Trump’s US election win, it was up almost 15 percent on-year against the dollar last month, which the finance ministry said hit export values for key products such as vehicles and steel. However, the weak reading was offset by a fall in imports, with crude oil and liquefied natural gas down significantly.
The country posted a surplus of 496.2 billion yen (US$4.47 billion), smaller than the 610 billion yen forecast in a survey.
“Even though the drag from the stronger yen has started to fade, the annual growth rate of both export and import values fell deeper into the red last month,” Marcel Thieliant, senior Japan economist at Capital Economics, said in a note.
Analysts said Japan’s exports are expected to give a boost to economic growth in October-December because of the sharply weaker yen.
Traders are shifting out of the yen and into the dollar on expectations Mr Trump’s plans to ramp up infrastructure spending and cut taxes will fan inflation, which will in turn force the Federal Reserve to lift interest rates.