SINGAPORE: Exports increased only 2.1% y/y versus 5.2% expected. While this was worse-than-expected, imports declined by 0.6% y/y. The latter was expected to rise 6.3%, making the miss here more intense than the former. When net exports are positive, it may add to growth. This is because it’s one of the four components of calculating GDP.
Not long after the data crossed the wires, the anti-risk Yen quickly reversed course as the Nikkei 225opened higher at Tokyo open. This makes sense when considering that the Bank of Japan is unlikely to change course in monetary policy any time soon. Such a scenario allows the Yen to focus on risk trends instead.
One currency that also showed a positive response to the data and maintained it was the Singapore Dollar. Singapore has an important trading relationship with Japan. As such, economic performance in the latter can have knock-on effects on the former. Keep an eye out for how other ASEAN bloc currencies respond in the aftermath. Japan’s exports rose 14.4% to Indonesia and 11.9% to Malaysia.
