Like many other countries around the world, Japan is slowing. The country is very much dependent on trade and the fact that the surplus turned into the biggest deficit in the past 2 years last month is extremely worrisome.
Exports rose 7.7 percent, but shipments to the US and China continued to slow. Imports actually rose 9.0 percent, but that was due to a 41 percent increase in the value of crude oil imports and not robust domestic demand. Trade with the US has actually fallen for the firth consecutive month, but the fact that demand from China also slowed indicates that even the Asian Giant may no longer be immune to the US slowdown. In addition to the trade deficit, the tertiary activity index dropped 0.2 percent which can be compared to the market’s forecast for a 0.2 percent rise. Carry trades in general were mixed with the Yen rising against the US and Australian dollars, but falling against the British pound and Swiss Franc.