Japan’s trade deficit increased despite a positive growth in exports that could not overcome the rise in imports. A weaker currency gave exporters a boost but also made imports more expensive. Even with lower energy prices the growth in imports increased the deficit. The USD/JPY broke through the 108 price level as safe haven flows have been reduced on the back of stronger US economic data and geopolitical turmoil easing. Inflation data in Japan and the FOMC could further weaken the JPY, which is something the central bank endorses if it’s a gradual shift. Rate divergence regains priority after investors look at the ... (full story)