15 Jan 2014
Flash: Japan's trade deficit is important shift for the world economy - BBH
FXstreet.com (Bali) - Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman, notes that Japan's chronic trade deficit is a significant shift for the world economy.
Key Quotes
"There have been four pieces of data that stand out. First, Japan reported a simply horrible current account figure. On an unadjusted basis, the deficit of JPY592.8 bln is the largest on record and is about 2/3 larger than the Bloomberg consensus."
"The unexpected deterioration was not so much a function of the trade account, but the investment income balance. Net investment income, which includes interest income, dividends, royalties, licensing fees, and the like, fell to JPY900 bln, the smallest five months."
"There does appear to be seasonal weakness in the investment income account in Q4 that likely exaggerated the deterioration."
"Still, the shift from Japan seeing a large trade surplus to a persistent deficit is a significant shift for the world economy."
Key Quotes
"There have been four pieces of data that stand out. First, Japan reported a simply horrible current account figure. On an unadjusted basis, the deficit of JPY592.8 bln is the largest on record and is about 2/3 larger than the Bloomberg consensus."
"The unexpected deterioration was not so much a function of the trade account, but the investment income balance. Net investment income, which includes interest income, dividends, royalties, licensing fees, and the like, fell to JPY900 bln, the smallest five months."
"There does appear to be seasonal weakness in the investment income account in Q4 that likely exaggerated the deterioration."
"Still, the shift from Japan seeing a large trade surplus to a persistent deficit is a significant shift for the world economy."