On Wednesday, the Japan's Cabinet Office published their export data that rose by 13 percent year-over-year in September. That was better than the forecast of 11 percent.
However, this figure is the slowest growth in seven months, and slumped from the previous month's increase of 26.2%. The Japan's exports to China increased by 10% on an annual basis.
Shipments were largely dominated by semi-conductors and plastic materials, while auto exports fell by 71.9 percent. Japan's exports to the U.S. fell as much as 3.3% as well.
That condition is marking the first decline in seven months due to weakening demand for cars and aircraft. Some other changes can be also seen in the market.
The Import Sector is Raising
In a separate release, the import data reported an increase of 38.6% on an annualized basis in September. This growth outperformed the expectations of a 34.4 percent increase.
However, that was weaker than the August's achievement of 44.7%. Broadly speaking, the Japan's imports last month were boosted by crude oil, coal and medicine as well.
With Japanese imports rising for eight straight months, a weaker yen against the U.S. dollar, and a surge in commodity prices, there are fears of japan's economic growth going forward.
The increase in the price of imported products is very detrimental to the trading of Japanese companies. Japan's consumer inflation is relatively stagnant, while import costs continue to swell.
The aim is to erode corporate margins, resulting in stunted economic growth. That was said Ryosuke Katagi, market analyst at Mizuho Securities
USD/JPY Increase Is Still Stable
The Slowing exports amid rising import costs are expected to add to the concerns of Bank of Japan policymakers. The central bank's top brass is currently facing the real pressure.
It is especially to take policy in light of the risk of stagflation. The release of Japanese export-import data this morning did not have a high impact on the movement of the Yen versus the US Dollar.
The USD/JPY pair moved in the range of 114.50 or strengthened by 0.12% on a daily basis when this news was written. In general, the strengthening USD is more influenced by the rise in the bond yields.
Meanwhile, Pound is Consolidated
The pound sterling edged down against some major currencies in early trading in the European session today. It is following the release of UK inflation data that missed market forecasts.
However, the pound is still supported by the expectations of a BoE rate hike. The GBP/USD moved away from the 1.3800 threshold, but was still within the range of a month's high.
The EUR/GBP squirmed only by 0.16 percent in the range of 0.8445. Elsewhere, the GBP/JPY pair fell by 0.1% to the 157.57 level so far. Monthly consumer price data showed a growth.
It was around 0.3% in the September 2021 (Month-over-Month) period which was slightly slower than the consensus expectations of 0.4%. What are the other changes?
The Interest Rate may not Happen Soon
The Annual inflation growth then decreased from 3.2R to 3.1% (Year-on-Year) in September 2021. Annual core growth also slipped from 3.1% to 2.9%, whereas consensus only predicted a decline of up to 3.0% (Year-on-Year).
The overall data suggest that the UK inflationary pressures may not be as strong as the market forecasts. However, the inflation rate proved to be still higher than the Bank of England's (BoE) target pegged.
It is especially at 2.0%. As a result, The UK released in September 2021 did not disturb the expectations of a BoE rate hike in the near future. BoE officials have recently expressed the urgency of raising interest rates.
The aim is to prevent the higher inflationary pressures from being more entrenched in the economy. They acknowledge that the current high inflation rate is largely due to supply-side problems.
