Bad News Delivered in Japan’s Trade Data

August 22, 2012

Asian markets were rattled by a reported 8.1% on-year decline in Japanese customs exports.  Shipments to the EU and China plunged by 25.1% and 11.9%, respectively.  Today’s meeting of EU President Juncker and Greek Prime Minister Samaras added to the nervous undertone of the market.

Share prices declined 1.1% in the Philippines and Hong Kong, 0.8% in China and New Zealand, 0.5% in Indonesia, 0.3% in Japan, and 0.2% in India.  Europe’s declines have been steeper, with the Spanish IBEX losing 2.3%, the British Ftse off 1.2%, and the German Dax and Paris Cac down 1.0%.  U.S. stocks are comparatively steady, showing just a marginal dip.

10-year sovereign bond yields dropped by nine, seven, and five basis points in Germany, Britain, and the United States.  10-year Japanese JGBs are steady.

The gold price has retained yesterday’s advance and is at $1643.20 per ounce.  Oil dipped 0.3% to $96.53 per barrel.

Japan’s customs clearance trade balance swung to a JPY 517 billion deficit in July (not seasonally adjusted) from a surplus of JPY 70 billion a year earlier because of the aforementioned sharp decline in exports.  Imports rose 2.1%.  Analysts were expecting a deficit but of only about JPY 275 billion.  The seasonally adjusted deficit was at JPY 325 billion, marginally greater than the upwardly revised JPY 318 billion in June.

Japanese supermarket sales were 4.9% lower in July than a year before versus a 3.9% drop in the year to June.  The drop in department store sales reported Tuesday of 3.3% had also showed acceleration in pace, pointing to a bigger fall in large-store retail sales to be announced later this month.

U.S. existing home sales rose 2.3% to 4.47 million in July.  Lately, housing has provided the most consistent good news from the United States.  But mortgage applications slid 7.4% last week.

Sedlabanki, Iceland’s central bank, left its key 7-day collateralized lending rate at 5.75% as expected.  Two rate increases had been implemented earlier in the spring.

Australia’s index of leading economic indicators rose 0.5% in June according to Westpac’s measure.

Malaysia’s jobless rate slid to 2.8% in June from 3.1% the month before.  The Filipino current account recorded a $3.2 billion surplus in July. 

South African consumer price inflation slowed to 4.9% in July from 5.5% in June.

Norway’s unemployment rate remained steady at 3.0% in May-July.  Danish retail sales slid 0.2% in July, the same result as in June, and were 2.6% lower than in July 2011.

Canadian  retail sales fell 0.4% in June and posted a smaller 1.7% 12-month increase.  Mexican retail sales increased 1.8% in June and 5.6% from a year before.  Mexican wholesale turnover advanced 1.5% on month and by 3.7% on year.

FOMC minutes from the August 1 meeting will be released at 18:00 GMT today (14:00 local time).  Chicago Fed President Evans made dovish remarks overnight.

Copyright 2012, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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