Friday 28 January 2011

Japan's trade surplus doubles but debt downgraded

There was good news on Japan on Thursday. From AFP/CNA:

Japan's trade surplus more than doubled in 2010 and exports to key trade partner China hit a record high, data showed Thursday, as robust overseas demand indicated gathering momentum for a fragile recovery.

Analysts said that the second consecutive monthly acceleration in Japan's exports in December, which grew 13 percent year-on-year, also showed that the country's economy was starting to move forward after a lull.

But there was also bad news. Again from AFP/CNA:

Japan's currency tumbled on Thursday after credit ratings agency Standard & Poor's downgraded Tokyo's public debt for the first time since 2002.

The dollar rose to 82.86 yen compared with 82.16 yen a day earlier...

S&P cut Japan's sovereign debt rating to "AA minus" from "AA", accusing the government of lacking a "coherent strategy" in efforts to ease a mountain of debt.

Elsewhere, the economic reports were mixed.

Reuters reports the US data:

U.S. housing and factory data on Thursday showed the economy still gaining strength in December but at a pace unlikely to cause the Federal Reserve to rethink its stimulus program...

The National Association of Realtors said its Pending Home Sales Index, based on contracts signed in December, rose 2 percent to 93.7. The increase, which was above economists' expectations for a 1.0 percent gain, pointed to another rise in sales of previously owned homes this month.

A separate report from the Commerce Department showed orders for a range of domestically manufactured goods gained 0.5 percent last month. But a nearly 100 percent drop in civilian aircraft pulled overall orders down 2.5 percent.

Economists shrugged off a surprise jump in new claims for unemployment benefit as a result of bad weather rather than a sudden setback for the labor market.

Meanwhile, there has been a dip in confidence in the euro area. Bloomberg reports:

European confidence in the economic outlook held close to the highest in more than three years in January as manufacturers became more optimistic.

An index of executive and consumer sentiment in the euro area slipped to 106.5 from a revised 106.6 in December, the European Commission in Brussels said today. The December reading was the highest since September 2007. Economists had forecast a gain to 106.7, the median of 25 estimates in a Bloomberg News survey showed.

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