On Wednesday, the Japan’s cabinet office released the export data that increased by 3.7% year – over – year in July. This achievement was lower than the 39% forecast.

Furthermore, that was also lower than the June period number which was reaching 48.6%. The good news is that the Japan’s export is still having the positive performance. 

It is because that sector has been successfully maintaining the two digits growth for five months in a row. Export to China as the biggest partner of Japan increased by 18.9%.

That was led by the plastic and chip devices maker. Meanwhile, the delivery of Japan’s products to the United States rose by 26.8%. That was dominayed by the car export, spare parts, and motorcycle. 

The Capital and Output will still be Stronger

The export is still in an upward trend and it will be continued in several months ahead. That is although the car productions may face the supply chain problem because the chip lacking.

An analyst then said that although the service sector has a potential to face the COVID-19 impact pandemic, the capital purchase and company output is predicted to be in a strong position. 

It is especially in the third quarter this year. Meanwhile, the import data of Japan collects the 28.5% increase yearly in July. That breaks the rising expectation of 35.1% and also lower than the growth before. 

For your information, the growth before was in 32.7 Japan's trade balance had a surplus of 441 billion yen in July, up significantly from June's surplus of 384 billion yen based on the data. 

The Strong Foreign Demand is a Supporter Factor

The good trading data in Japan cannot be separated from the strong foreign demand which help the industry activities. One thing is now becoming a concern faced by the market participants. 

However, a global shortage of semi-conductor raw materials and signs of a slowdown in China's economy are raising concerns amid a significant rise in Corona Delta cases in many countries.

The release of Japanese trade data this morning did little to trigger the yen versus the U.S. dollar movement. The USD/JPY pair is currently in the range of 109.55 level so far. 

That is not far from the previous day's rising area. The investors’ attention will next be on the release of FOMC minutes to look for some clues as to the Fed's tapering outlook.

The Central Bank Announcement 

The New Zealand dollar briefly crashed to a low record since November 2020 in the Asian session. Then it was immediately surged after receiving news of the central bank policy. 

It is said that the central bank was simply 'delaying' (rather than 'cancelling') plans for a rate hike. However, the NZD/USD is locked again in the range of 0.6920 right now. 

That is due to the rising uncertainty over the economic outlook following the imposition of a national lockdown yesterday. The RBNZ or New Zealand Central bank made a decision yesterday. 

It decided to maintain the interest rate in the level of 0.25%. That announcement gave a sign the interest rate increase chance is still opened as long as the economy uncertainty is fading. 

RBNZ may be the First to Increase the Rate

The market participants are now moving the interest rate increase time of RBNZ to several months ahead. That bank may still become the first major bank which increase the interest rate. 

It is especially after the pandemic which comes together with the assumption that the virus spread in New Zealand can be handled soon. The OCR speed is sharper than the prediction. 

The initial date of tightening is moving from the III/2021 quarter to become IV/2021 quarter. That shows the interest rate increase in October and November. Each is in the 25 points basis.