The Nikkei has been rising since October 13th, sending the Japanese composite to a 6 month high this week. The index showed steady gains throughout the week as firms posted solid earnings results. However the yen is performing persistently sluggish and will be heavily impacted by the US Elections in November. Economists’ forecast that if Hilary Clinton wins against Donald Trump, it is expected to give investors additional confidence in the US Dollar. Thus this may send the Yen into deeper uncertainty going forward. The Greenback has strengthen against the Yen and has been trading at around ¥104.
On 25th Oct, Japan announced a trade surplus of ¥350 billion mainly due to slow exports within Asia and America. Despite the slight decline in exports the economy was helped by falling oil prices. The Bank of Japan is still reluctant to change its monetary policy on negative interest rates, hoping it can stimulate with a soft yen. The BOJ remains adamant they can support the Japanese government in restoring the economy through its newly revised monetary policies. There are early signs that the economy is no longer in deflation territory, it is supported by positive export growth in recent months.
The next Bank of Japan meeting is scheduled for Oct 31st.