JPY Daily News

Japan Experiences First Trade Deficit Since 1982

The JPY experienced a rather bearish session yesterday versus the other major currencies. The Yen was traded with falling trends during the early trading sessions, but managed to recover slightly later on.

The Japanese economy is beginning to be damaged by the U.S. economic slowdown. A good example was delivered yesterday as the Japanese exports to the U.S. fell by 19.1% in August, marking its lowest figures since January 2006. This was one of the reasons why Japan's Trade Balance figure was released yesterday as -0.11T for August. Excluding the month of January, when Japanese shipments overseas tend to drop on slower factory activity during the New Year holidays, it was the first deficit since 1982. The JPY lost its bullish momentum as investors lost their confidence that the Japanese economy will be less affected by recent events, and it is once again proving that a slowdown in U.S. economic activity also means a slowdown for global economic activity.

As for today, the Tokyo Core Consumer Price Index, which accounts for a majority of overall inflation, will be released and is forecasted by analysts to increase by 1.5%. Traders are advised to follow the publication of this indicator as a higher-than-forecasted result might generate an uptrend for the JPY, as high inflation may compel the Japanese bank chiefs to raise interest rates, and investors are very much aware of this. Traders should also stay tuned to the development of the U.S. economic rescue plan as further details may determine today's directions.

Current Time: 05/27 01:36 GMT

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#	Time	$€£¥	Event	Per.	Prev.	Fore.	Act.	Imp.
09/25
	00:30	JPY	Tokyo Core CPI	y/y	1.5%	1.5%	1.7%
	00:30	JPY	National Core CPI	y/y	2.4%	2.4%	2.4%