Strong yen puts brakes on Japanese exports

IN HOT WATERS: Japanese exports likely to fall 4.8 percent in August from a year earlier, compounding July’s 14.0 percent drop.

TOKYO: Japan's exports were expected to post an 11th consecutive fall in August, a Reuters poll found on Friday, as weak foreign demand and a persistently strong yen took their toll.

Exports were seen likely to fall 4.8 percent in August from a year earlier, compounding July's 14.0 percent drop, which was the most rapid decline since the global financial crisis in 2009.
The poll found imports were expected to drop 17.8 percent from a year ago to produce a trade surplus of 202.3 billion yen ($2 billion) — a third straight monthly trade surplus.
"Advanced countries' economies continue to grow moderately but China's economy is slowing down, so the global economy has not regained its momentum," said Takeshi Minami, chief economist at Norinchukin Research Institute.
"In addition to that, the strong yen lowered both import and export prices."
The Finance Ministry will issue the trade data at 8:50 a.m. on Wednesday Sept. 21 (2350 GMT Sept. 20).
The yen hovered around 102.00 yen per dollar on Friday in jittery trade ahead of the Bank of Japan's monetary policy decision next week.
The BoJ will conduct a "comprehensive review" of the effect of its monetary policy at its meeting Sept. 20-21
The central bank will consider making negative interest rates the centerpiece of future monetary easing by shifting its prime policy target to interest rates from base money at the review, sources familiar with its thinking said.
The poll showed analysts were divided over whether the BoJ would cut its minus 0.1 percent interest rates even deeper next week.
Six of 11 analysts predicted the BoJ would keep its negative interest rates unchanged, while three expected the bank would cut its rates to minus 0.2 percent. Two said the rates would be lowered to minus 0.3 percent.
As the Bank of Japan considers shifting the focus of monetary policy at next week's review, some analysts say the key will be how well it communicates the intent of the change as further significant easing is not necessary at this stage.