Things are going from worst to worsterer in Japan. Somewhat ironically (given our recent post), this update to the state of play awaiting Mr. Abe is not good. With the Senkaku debacle flaring still in the background, we wonder just how much 'face' the Japanese are willing to lose as their exports fall 6.5% (for the fifth month in a row) dominated by an 11.6% drop 'to' China (which accounted for around 20% of Japanese exports until recently) making it extremely likely the nation is headed for yet another recession. The trade balance missed large to the downside yet again, extending a multi-year trend (and drastically reducing the 'net' exports capital buffer), and so (as USDJPY remains 'strong' despite REER being well below its 1995 peak) we are to believe yet another JPY1tn Koo-nesian fiscal stimulus will do the trick.
The trade balance is crushing the hopes and dreams of any recovery here...and removing that 'net' export capital buffer that helped for so long...
as exports plunge for the fifth month in a row (which seems like a never-ending story for the last few years)...
Crushed by the weight of China's door slamming shut...
as USDJPY 'strength' doesn't help vs JPY REER weakness (thank you Ben...)
Charts: Bloomberg and CLSA