Alexander Kuptsikevich
FxPro Financial Services Limited
The impact of the Yen's fluctuations was evident in the country's latest external trade report.
On a seasonally adjusted basis, January recorded the highest surplus in three years. The 235B yen ($1.57B) surplus of exports over imports represents 1.3% of total turnover - a fraction of the 11% the country enjoyed 20 years ago.
Yen's demise started in March 2022, and in the following year, there was a twist in trends when a decline in imports accompanied growth in exports. The first half of this dynamic is less dependent on Japan, as imports are largely commodities and energy, which are driven by global trends.
Exports, on the other hand, have been rising steadily since last January. The latest data show an 11.9% y/y increase in exports, while imports fell by 9.6% y/y.
The trade surplus is a supportive factor for the Yen. However, traders must also factor in the Bank of Japan's ultra-loose monetary policy, which makes the Yen attractive to the carry trade that weighs on the exchange rate during periods of economic growth.
Trade Responsibly. CFDs and Spread Betting are complex instruments and come with a high risk of losing money rapidly due to leverage. 77.37% of retail investor accounts lose money when trading CFDs and Spread Betting with this provider. The Analysts' opinions are for informational purposes only and should not be considered as a recommendation or trading advice.
Recommended Content
Editors’ Picks
EUR/USD stays in positive territory above 1.0850 after US data
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.