JPY Machine Orders And Trade Balance
The total value of machine orders placed at manufacturers in Japan is a figure which can provide us with a lot of information regarding business capital spending. An increase in this figure generally means there is a more confidence amongst businesses and would also be a positive sign for employment since more machinery would require more workers.
The trade balance figure is the difference in value between exports and imports. A positive figure indicates a trade surplus while negative indicates a trade deficit. With Japan's economy being largely export-led, the data can help us understand Japan's economy better and possible changes in exchange rates.
Usually these figures have an effect on the Yen's value. A trade deficit brings downward pressure on the Yen's value. We saw last night Japan's trade balance and machine orders came out worse than predicted but there has been little impact on the market in response. In fact, instead of depreciating the Yen actually increased 0.1% this morning amid the US fiscal cliff. However it might be the case that because of these figures being low the Bank of Japan may conduct additional monetary stimulus which would lead to the Yen depreciating against the US dollar.
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