USD/JPY flows: Partially Retracing the Post BoJ Gains

The Japanese November y/y Trade Data shows export contracted for the first time in three months while import continue to witness double digits losses. However, on headline balance it is beating estimates as import contracted much larger than expected. Exports to Asia continue to fall, which seems to be the drag for the whole year and understandable given the state of Chinese economy. There is little headline to follow up Tuesday's BoJ meeting but we heard from Nikkei that the Japanese government is raising its long-term interest rate estimate for budget from 1.1% to 1.9%, which seemed to suggest they are forecasting an exit from current policy soon.

USD/JPY is trading 0.28% lower at 143.43.