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Forex pairs in this Article » USD/JPY (Bali) - Japan's account deficits should continue to put downside pressure on JPY, notes Nomura Research Analysts Team.

Key Quotes

"Japan recorded current account deficits again in November, both before and after seasonal adjustment. The seasonally adjusted deficits slightly decreased to JPY47bn (USD0.4bn) from JPY59bn in October, but there have been deficits for three consecutive months. Before seasonal adjustment, trade deficits was JPY593bn (USD5.6bn), the biggest deficit for November."

"The trade deficits have remained around their historically highest level, as higher oil prices and accelerated demand ahead of the consumption tax hike are boosting nominal imports. The trade deficit in the first 20 days of December reached JPY1380bn (USD13.1bn), rapidly increasing from the same period in 2012 (JPY755bn)."

"We expect record trade deficits and a weak current account balance to continue until next March, putting downside pressure on JPY. Japanese FDI remains strong at JPY463bn (USD4.4bn), suggesting Japanese corporate flows remain JPY negative."
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