Japan reported a larger than expected December trade surplus - BBH

Analysts at BBH note that the Japan reported a larger than expected December trade surplus (~JPY641.4 bln, more than twice the Bloomberg median).  

Key Quotes

“The December trade balance is nearly always better than November's but what stands out is the jump in exports.  The 5.4% rise year-over-year is nearly five times larger than expected and snaps a 14-month contraction.  Of note, exports to the US rose 1.3% from a year ago, while exports to the EU were off 4%.  The big story is the 12.5% jump in exports to China, its largest trading partner.  On a value basis, exports of auto parts and electrical circuits each rose 38%.”

“The contraction of imports continued.  The 2.6% decline year-over-year was larger than expected, though it is the smallest contraction since first going negative at the start of 2015.  The combination of stronger exports and weaker imports allowed Japan to report its fourth consecutive trade surplus.  It may spur economists to revise up Q4 GDP forecasts, and turn more optimistic on Q1 17.  Both the Topix and Nikkei rose for the first time this week.  The 1.0% and 1.4% respective gains were the best since January 4 the first trading session of the year for Japan.”