Asian Markets Flooded With Weak Economic Data

Asian markets were flooded with economic data this morning unfortunately most of it was printed in red. Japan released its monthly data dump with GDP being revised up but lower than forecast. Revised government data on Tuesday showed Japan’s gross domestic product (GDP) in the third quarter rose at a 1 percent annualized rate, compared with a preliminary reading of a 0.8 percent contraction.

Business investment during the quarter climbed 0.6 percent in the third quarter, reversing the preliminary 1.3 percent quarterly drop.  The result compared with the median estimate of 0.1 percent growth in a Reuters poll of economists. A technical recession is usually defined as two consecutive quarters of economic contraction from the previous three months.

The USDJPY dipped 25 points as the greenback weakened to trade at 123.14 remaining near the top of its trading range.  Asian stocks were lower on Tuesday as energy-related shares fell on news that oil prices had dropped to their lowest levels since 2009. Japan’s current account surplus grew 72.3 percent from a year earlier in October, the 16th consecutive month of surplus, boosted by plunging oil imports and an increase in the travel surplus, the government said Tuesday.

The surplus in the current account balance — one of the widest gauges of a country’s international trade — stood at 1.46 trillion yen ($11.83 billion) and was also lifted by a goods trade surplus of 200.2 billion yen, the Finance Ministry said.

The goods trade logged the surplus against a deficit of 764.9 billion yen a year earlier, with exports falling 3.7 percent to 6.33 trillion yen while imports declined 16.4 percent to 6.13 trillion yen, the ministry said in a preliminary report.

Data from China showed the country’s exports fell 3.7% in yuan-denominated terms for the month of November compared to a year earlier, while imports fell 5.6%. Expectations were for a fall in exports of 2.9% and a fall in imports of more than 11%. The latest figures leave the country with an overall trade surplus of 343bn yuan ($53.4bn). Hong Kong’s Hang Seng was down 1.36% at 21,900.59, while the Shanghai Composite index was down 0.92% at 3,504.58. A key driver of world growth and the planet’s biggest trader in goods, the slowdown in China’s economic expansion has sent jitters across global stock markets and taken a great toll on resource-rich countries for which the Asian country is a crucial client.

The Chinese yuan took a beating after the release of the trade data falling 96 points against the US dollar to trade at 6.4178.  The onshore yuan weakened 0.2 percent to a four-year low. China’s foreign-exchange reserves declined last month as the central bank sold dollars to prop up the local currency ahead of approval from the IMF for the yuan to be included in its basket of reserve currencies. 

The disappointing Chinese data weighed heavily on the global markets weighing on commodities currencies such as the kiwi and the Aussie. The kiwi declined 2 points supported by the fall in the US dollar to trade at 0.6642 as traders look forward to the central bank rate decision this week. The Aussie fell 9 points to 0.7259 after the NAB business confidence report printed higher than last month.