Data on Monday showed Japan’s exports fell 10.1 percent in April from a year earlier, the fastest decline in three months as a stronger yen and weakness in China and other emerging markets take their toll on the country’s shipments.
Advertisement
The ministry said in a preliminary report that the sharp decline in imports values brought by the weakening crude oil prices contributed to the largest trade surplus since March 2010.
Exports from Japan fell by 10% in April compared with the same month a year ago.
Asia markets trading mixed on Monday, with the Japanese benchmark index falling, as markets adjust to a slew of recent comments from the US Federal Reserve about a possible interest rate hike in June.
In afternoon trading, the dollar weakened to 109.92 yen from 110.15 yen in NY late Friday, while the euro was lower at 123.42 yen from 123.50 yen.
The benchmark Nikkei 225 index fell 1.09 percent, or 182.37 points, to 16,553.98 by the break, while the broader Topix index of all first-section shares dropped 1.01 percent, or 13.56 points, to 1,329.84.
Markets are now eyeing a G7 leaders’ summit in Japan beginning Thursday, which is to be attended by US President Barack Obama and other leaders.
Traders were reacting to the solid trade data from Japan and the end of the Group of Seven finance ministers’ meeting that concluded on Saturday.
Finance Minister Taro Aso said in the parliament today that a two-day move of 5 yen in either direction would be considered one-way and lopsided. “Market odds of a June rate hike ended the week at around 30 percent, up from 4 percent a week ago”.
Japan last intervened in currency markets around November 2011, when it tried to stem the yen’s rise against the greenback to keep an economic recovery on track after the quake-tsunami disaster earlier that year.
The WSJ Dollar Index BUXX, -0.16% a measure of the dollar against a basket of major currencies, was down 0.17% at 87.41.
Home appliance and electronics exporter Panasonic Corp also gained on the weaker yen, rising 3.4 percent by late morning. Goods sold overseas fell by 10.1% in April, while imports slumped by 23.3%.
“The market was convinced 100% that a tax hike will be delayed”, said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
At noon, the dollar fetched 110.11-12 yen compared with 109.95-110.05 yen in NY and 109.53-54 yen in Tokyo at 5 p.m. Tuesday.
In early deals, USA benchmark West Texas Intermediate for July delivery was down 14 cents at $47.94 a barrel while Brent crude for July slipped 19 cents to $48.16.
Advertisement
However, James Bullard, president of the St. Louis Fed and a voting member of the policy-setting Federal Open Market Committee, said in a speech on Monday in Beijing that U.S. labour market and inflation data suggested the Fed s projection “may be more almost correct”.
