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 turns positive and reaches 1.0300
The resurgence of the selling pressure in the US Dollar now motivates EUR/USD to regain some fresh traction and test the 1.0300 region on Thursday, as investors continue to warm up for Trump 2.0.
GBP/USD treads water around 1.2230
In quite an apathetic day in the FX galaxy, GBP/USD hovers around the 1.2230 area in a context of subdued price action in the Greenback and further correction in UK 10-year gilt yields.
Gold on its way to test record highs
Prices of Gold advances further and manage to reclaim the key $2,700 mark per ounce troy on Thursday in response to the absence of traction in the US Dollar and diminishing US yields across the board.
Bitcoin holds near $100K ahead of Donald Trump's inauguration
Bitcoin's price edges slightly lower and trades around $99,200 on Thursday after rallying 4% following the previous day’s US CPI release. Despite this recent rise in BTC prices, traders should keep watch on US Retail Sales data for December on Thursday, as it could provide more volatility.
Eurozone industrial production ticked up in November
The slight 0.2% rise in production from October is insufficient to indicate a reversal of the two-year downward trend. Overall, the outlook for industry remains quite weak at the start of the year.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.