Release Explanation: This report measures the difference between the total value of exports and the total value of imports. A positive figure indicates a trade surplus while a negative value represents a trade deficit. Because Japan’s economy is highly export-led, trade data can give critical insight into developments in Japan’s economy and changes into foreign exchange rates.
Trade Desk Thoughts: The Japanese trade balance came in at -0.04 trillion as the country saw a surplus in February. This is the first time in the last five months that there has been a surplus seen. Exports declined a record 49.4 percent from one year ago as global demand for products diminish due to the current financial slump. This report comes after Japan posted its largest deficit ever in January, again due to slowing demand for exports.
Forex Technical Reaction: After bouncing off the neutral pivot point, which also coincides with yesterdays R1 level, at the start of the new trading day the Japanese yen was again coming to face resistance in the 98.50 level where the pair was rejected from in earlier trade.