The Yen Declining Early in the WeekMarket Review, 18/3/2019

The yen is falling early this week, losing some of its value against the US dollar. The pair is currently trading at 111.56. The Japanese PMI (January) got released earlier today, with the figures recovering to -3.40 MOM against the expectations of -3.70.

The February trade balance, meanwhile, revealed that the export fell by 1.30% YoY, with the expectations at -0.90%. In January, it lost 8.40% YoY, which was a multiple-year high since late 2016. Currently, the index has fallen for the third time in a row, which is a very bad signal for the Japanese economy. The latter is very much under pressure, and the government will have to react.

Curiously enough, the Chinese export recovered: it got 5.50% up YoY in Feb against -17.40% in Jan. This is quite positive, as China is one of the Japan's major trading partners. The export to the US also rose by 2%, while APAC export, such as that to Singapore and South Korea, declined. Overall, the Japanese import got reduced by 6.70% YoY over Feb (a high in 18 months), which means the economic system is not capable of coping with the outside pressure.

The yen does not often react to the domestic reports, apart from the cases when such reports contain catastrophic data. This is not the case today, of course, as the problems above are quite a routine for the country.