As I’ve said before, AEP doesn’t think the glass is half empty, he thinks it’s been annihilated by a nuclear explosion. Here’s his latest piece from the UK Telegraph.
This is slightly better than the 2.8% forecasts.
– Japan July Total CSPI Posts 22nd Straight Y/Y Drop
– Japan July Core CSPI (Ex Intl Transport) -1.2% Y/Y; Jun Rev -1.3%
– Japan July Total CSPI -0.4% M/M Vs June +0.1%
– Japan July Core CSPI -0.1% M/M Vs June Revised +0.1%
TOKYO (MNI) – Japan’s corporate service price index fell 1.2% in
July from a year earlier, the 22nd consecutive year-on-year drop, with
the pace of decline accelerating from the 1.0% decline posted in June,
Bank of Japan data released Wednesday showed.
The larger y/y decline in July was due mainly to drops in costs for
newspaper advertisements and television commercials, office leasing,
auto insurance premiums, architectural design services and ocean freight
transportation, all of which showed wider y/y falls than in June.
The downward pressure on prices has eased generally since the CSPI
hit a record drop of -3.8% in August 2009, which was the largest decline
since the BOJ began compiling CSPI data in January 1985.
The total CSPI, which stood at 97.1 in July against 100 in the 2005
base year, was down 0.4% from the previous month after rising 0.1% in
June. It was the fourth m/m drop within the first seven months of the
Core CSPI excluding international transportation, a fairly new
measure free of volatile factors, dropped 1.2% year-on-year in July
after falling by a revised 1.3% in June (preliminary -1.2%).
Month-on-month, the core CSPI was down 0.1% in July after rising
0.1% in June (revised from a preliminary +0.2%). It was the first m/m
drop in three months.
International shipping charges can fluctuate sharply due to changes
in demand from China and other emerging countries as well as due to yen
moves against the dollar.
In July, the larger y/y drop in total CSPI compared with June was
due mainly to the downward contribution from advertising services, real
estate services, finance and insurance, “other services” (civil
engineering, etc.) as well as transportation.
Meanwhile, positive contributions to the index came from leasing
and rental as well as information and communication.
The index for transportation, which accounts for about 21% of the
index weighting, was down 0.3% year-on-year in July after falling a
revised 0.3% in June.
Within this category, ship chartering fees fell 8.8% year-on-year
(vs. -8.7% in the previous month), while ocean freight transportation
costs dipped 1.8% (vs. unrevised +4.1% the previous month).
The index for advertising services (weighting: 6.85%), which
includes TV commercials, fell 1.3% on the year, following a revised 0.2%
rise in June.
The index for information and communications, including software
development and mobile phone charges (weighting: 21.65%) dropped 1.0% on
the year, compared with a revised -1.0% in the previous month.
The index for finance and insurance (weighting: 5.91%) slipped 1.0%
on the year after falling a revised 0.8% in the previous month.
The corporate services price index tracks prices for a wide range
of corporate services, ranging from finance and insurance charges to the
cost of shipping goods by road rail, air or sea.
It also includes software development costs, telecommunications
charges and legal and accounting fees.
Last year, the BOJ changed the base year for its corporate service
price index to 2005 from 2000, which takes place every five years, while
reshuffling the services covered in the data to reflect more high-tech
and diversified business activity, effective September 2009 data.
Under the 2005 base year, the total CSPI hit a recent peak of 102.0
in July 2008, when demand from China to import iron ore and coal ahead
of the Beijing Olympics peaked, pushing up global ship chartering and
By contrast, the core CSPI was largely leveling off in several
months through July 2008, when it was only at 99.6.
The change is designed to boost the accuracy of the indicator
following technology innovation. Both the government and the BOJ
routinely change the base year for the price data they compile to
mitigate the upward bias typically found the further the data is from
the base year.
** Market News International Tokyo Newsroom: 81-3-5403-4833 **
I think we should get used to seeing the JPY appreciate in overnight markets once the threat of BoJ intervention recedes. As the BoJ said this morning, they are considering unilateral intervention, in other words they would intervene on their own without the help of other central banks.
This means the risk of intervention is at its highest during the Tokyo trading session and that’s why we are seeing short-covering of USD/JPY and the JPY crosses. Once the BoJ goes home for the night, we will likely see the downward pressure re-emerge.
– Japan July Exports +23.5% Y/Y, Up 8 Months In Row
– Japan July Imports +15.7% Y/Y, Up 7 Months In Row
– Japan July Exports To US +25.9% Y/Y, Up 7 Months In Row
– Japan July Exports To EU +13.3% Y/Y, Up 8 Months In Row
– Japan July Exports To Asia +23.8% Y/Y, Up 9 Months In Row
– Japan July Exports To China +22.7% Y/Y, Up 9 Months In Row
TOKYO (MNI) – Japan’s trade surplus more than doubled from a year
earlier, up 119.9% at Y804.20 billion in July, the 14th consecutive
month that the surplus has exceeded the year-ago level, but the pace of
export growth y/y decelerated for the fifth month in a row, Ministry of
Finance data released on Wednesday showed.
Japan has posted a trade surplus for 16 months in a row, with the
country’s last deficit, of Y5.41 billion, recorded in March 2009.
July’s surplus followed a downwardly revised surplus of Y686.42
billion in June (preliminary +Y686.96 billion). In July 2009, Japan
posted a trade surplus of Y365.67 billion.
The July 2010 figure came in well above the consensus call for a
surplus of Y469.9 billion.
The latest data showed that Japanese exports rose 23.5% in July
from a year earlier to Y5.98 trillion, the eighth straight year-on-year
However, the pace of export growth decelerated for the fifth month
in a row after +27.7% in June, having peaked at +45.3% in February.
Today’s data indicated that Japan’s export-driven economic recovery
may be moderating in the wake of a slowdown in Europe, the U.S. and
In July, shipments of automobiles, iron and steel products as well
as semiconductors posted double-digit percentage growth from a year
earlier but at a slower y/y pace than in the previous month.
Last year, demand for Japanese cars and electronics had recovered
gradually in the aftermath of the global financial crisis and recession.
Meanwhile, imports rose 15.7% on the year to Y5.18 trillion in
July, posting the seventh consecutive y/y rise but slowing from +26.1%
The value of imports of liquefied natural gas, iron ore and
non-ferrous metals rose sharply.
Exports to the United States rose 25.9% from a year earlier to
Y972.2 billion, up for the seventh consecutive month. While the export
growth pace was above June’s 21.1% rate, it has generally trended down
from +50.5% in February.
Automobiles, power-generating machines and auto parts led the
increase in U.S. exports.
Shipments to the European Union rose 13.3% to Y632.6 billion in
July, posting the eighth straight year-on-year gain. The pace of growth
accelerated from +9.0% in June, which was the slowest since +1.4% in
Construction machinery, computer parts and auto parts led the
increase in exports to Europe.
Japan’s exports to Asia rose 23.8% to Y3.34 trillion in July,
marking the ninth consecutive month of y/y gains, with the pace slowing
for the sixth month from a revised +31.6% in June and a recent peak of
68.3% in January.
As seen in the previous month, higher shipments of semiconductors,
iron and steel products as well as automobiles led Japanese exports to
Exports to China, the largest market for Japanese goods, expanded
22.7% to Y1.16 trillion in July, showing the ninth consecutive y/y rise.
Chinese export growth was only slightly higher than in the previous
month (+22.0% y/y), when its pace slowed for the fifth month in a row
since hitting a recent peak of +80.0% in January.
Shipments of metalworking machinery, automobiles and semiconductors
led the gain.
On a seasonally adjusted basis, Japan’s trade surplus posted a
surplus of Y610.42 billion in July, up 18.6% from the previous month.
Seasonally adjusted exports posted the third straight
month-on-month drop, down 1.4% in July, while imports fell 3.5%, the
showing the second straight m/m fall.
Japan’s trade balance returned to a surplus of Y90.97 billion
(still -94.3% y/y) in September 2008, but in the wake of the collapse of
U.S. investment bank Lehman Brothers it plunged into negative territory
again, posting deficits from October 2008 until January 2009.
** Market News International Tokyo Newsroom: 81-3-5403-4833 **
EUR/JPY, GBP/JPY and AUD/JPY are all trading towards their session highs, up 50 pips on the session as Tokyo once again ignores the short-term trend from overnight and decides to book some profit.
The next levels to watch topside are; the previous lows at 107.30 in EUR/JPY and 84.75 in USD/JPY.
Also reports in some Japanese newspapers that Japanese authorities are mulling unilateral Yen selling. USD/JPY is trading quietly around 84.20.
- July exports were +23.5% YoY and imports were +15.7% YoY
- Trade balance came to JPY804 billion
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