- Japan’s oil imports dropped 14.7% in June
- June trade deficit was Y 423.9 billion
- CPI rate remains at 0%
Time : 07-20-2020
Pivot : 107.31
Technical View : Long above 107.51
Targets : 107.71 – 107.79 – 107.93
Comments : Weak Bullish
Last Price : 107.23
According to official data released on Monday, Japan saw a 14.7% decline in oil imports in June compared to the same month in the previous year. However, this drop was not as pronounced as in May when YoY oil imports fell 25%.
Exports and imports affected
The Japanese economy has been impacted significantly due to the effect of COVID-19. One of the sectors that have been affected greatly is the export industry, which, according to data, was worse than anticipated in June, with imports also dropping, resulting in a blow out on June’s deficit
In June, the total trade deficit was 423.9 billion yens, which was wider than the expected deficit of 331.1 billion yens and the but an improvement from the previous month’s 601.0 billion yens. Exports dropped 26.2% YoY for June, but it improved from May’s 28.3% drop. Equally, YoY imports dropped 14.4%, which was narrow than the expected 17.6% and a massive improvement from the 26.2% decline reported in May. Considering Japan is an export powers; therefore, the significant export miss is an indication that the current outlook of the global economy is worse than expected.
CPI rate remains at 0%
Japan’s CPI remains at 0.00%, mainly due to re falling global crude oil prices and inflation expectations, there have been weak indicators observed. The effect of deflation oriented price-setting behavior that is common with companies lowering the price of goods has not spread on Japan, as shown by the CPI data covering. For the time being, Japan expects the YoY CPI rate change to remain negative because of the pandemic and depressed oil prices. Equally, the central bank doesn’t see the inflation rate approaching 2% in the near term because demand recovery will be gradual.