16 Dec 2014
Yen's move is stunning - BBH
FXStreet (Guatemala) - The BBH Global Currency Strategy Team explained that trade-weighted measure is more important than bilateral measures when considering the impact of currency movement on a domestic economy.
Key Quotes:
“That needs to be coupled with measures of export and import elasticities”.
“The magnitude of yen's move is stunning. Without a significant crisis Japan has seen the yen on a trade-weighted basis first appreciated by 20% in the 2010-2012 period, and subsequently fallen by a little more than 40%. Between October 15 and December 8 it fell by 11%”.
“Contrary to what many would have expected. The Japanese trade surplus has deteriorated. In 2009, it recorded an average monthly trade surplus of JPY223 bln. In 2013 the average monthly trade deficit was JPY956 bln. In the first nine month of this year trade deficit has averaged JPY936 bln. The November trade report will be released the early on December 17 in Tokyo. It is expected to be around average”.
“In addition, as we learned yesterday in the Tankan Survey, the more acceleration of the BOJ's asset purchases, the 9% weakening of the yen and 24% rise in the Nikkei from mid-October to December 8 failed to lift business sentiment.
"Compared with the yen and dollar, the euro on the BOE's trade-weighted measure has hardly moved".
Key Quotes:
“That needs to be coupled with measures of export and import elasticities”.
“The magnitude of yen's move is stunning. Without a significant crisis Japan has seen the yen on a trade-weighted basis first appreciated by 20% in the 2010-2012 period, and subsequently fallen by a little more than 40%. Between October 15 and December 8 it fell by 11%”.
“Contrary to what many would have expected. The Japanese trade surplus has deteriorated. In 2009, it recorded an average monthly trade surplus of JPY223 bln. In 2013 the average monthly trade deficit was JPY956 bln. In the first nine month of this year trade deficit has averaged JPY936 bln. The November trade report will be released the early on December 17 in Tokyo. It is expected to be around average”.
“In addition, as we learned yesterday in the Tankan Survey, the more acceleration of the BOJ's asset purchases, the 9% weakening of the yen and 24% rise in the Nikkei from mid-October to December 8 failed to lift business sentiment.
"Compared with the yen and dollar, the euro on the BOE's trade-weighted measure has hardly moved".