Japan's Trade Deficit Soared to Record In January, China Smartphone Sales Rebounded

Arjun Pandit
16 Feb, 2023
Mumbai

Stocks traded higher in Asia following positive sentiment in international markets and the yen extended its two-week slide. 

Stocks in Tokyo closed higher on the global optimism and following the new one-year highs in European markets and hopes of faster rebound in China. 

 

Japan Record Trade Deficit In January 

Japan's January trade deficit widened to a record high of  ¥3,496.6 billion from ¥2,199.4 billion in the same month a year earlier.

 Imports increased 17.8% ¥10,047.8 billion, the 21st monthly double-digit increase but rose at the slowest pace in 21 months.  

Exports rose at a much slower pace of 3.5% ¥6,551.2 billion, the 23rd straight month of growth and the slowest pace since February 2021

Japan reported a trade deficit of ¥19,971.3 billion, the second straight annual shortfall and the largest since 1979 after the price of imported energy soared. 

The yen drifted lower for the second week in a row after the release of record trade deficit data and on the uncertainties about the Bank of Japan's yield curve control policy and investors debated the need to exit from the ultra-loose monetary policy. 

 

Japan's Trade Unions Look to Revive Wages from Three Decades of Stagnation

Trade unions and businesses kicked off their annual wage hike talks in Tokyo with the union representative looking for wages to rise as much as 5% in 2023. 

The Japanese Trade Union Confederation or Rengo's President Tomoko Yoshino proposed a 3% base pay increase  and additional 2% increase based on seniority. 

Masakazu Tokura, chairman of the Japan Business Federation, showed an open attitude towards negotiating higher wages. 

Real wages in Japan have stagnated for three decades and rose only 4.8% since 1991, lagging the 85% jump in South Korea and about 30% in Germany and France and 50% in the U.S. and U.K., according to the data available from the Organisation for Economic Cooperation and Development or OECD based in Paris, France. 

The Nikkei index increased 0.7% to 27,696.44 and the Yen edged lower to 133.83 against the yen. 

Automakers led the gainers and Mitsubishi Motors Co Ltd and Nissan Motor Co Ltd gained 4.1% and Mazda Motor advanced 37%.  

 

China Smartphone Sales Revival In January Lifts Hopes for 2023 Sales

Stocks in Mainland China and Hong Kong diverged after officials promised more stimulus. 

Tech companies were in focus after domestic smartphone sales in China soared in January, lifting hopes that the industry may finally rebound after five years of declining sales. 

Weekly sales of smartphones in China increased to 6.7 million units in January, 40% higher than in December but flat from the similar period in 2022, a report by Counterpoint Research showed the weekly trend.    

Weekly smartphone sales in China averaged 5.5 million and dropped  13.5% to 285.5 million units in 2022, according to IDC.

In 2022, smartphone sales in China fell below 300 million units for the first time in a decade.  

China is the largest market for smartphones in the world. 

The Shanghai Composite index declined 1% to 3,249.03 and the Hang Seng index increased 0.9% to 20,987.67. 

The Chinese yuan held steady with a downward bias to 6.895 against the U.S. dollar.  

Hong Kong’s seasonally adjusted jobless rate declined to 3.4% in the three months ending January 2023, the lowest since the fourth quarter 2019 and from 3.5% in the previous three-month period ending in December.

 

India's Services Surplus Expanded Faster Than Good Deficit In January  

Stocks in Mumbai opened higher but drifted lower after spending the day in the positive territory. 

Tech services and real estate companies led gainers for the second day in a row. 

The Sensex index increased 44.42 points to 61,319.51 and the Nifty index rose 20 points to 18,035.85. 

The Indian rupee edged lower to 82.71 against the U.S. dollar after the U.S. dollar traded higher in the region.

On the economic front, India's exports declined in January to $32.9 billion from $35.2 billion a year and the goods trade deficit increased to $17.7 billion from $17.2 billion a year ago. 

Overall goods and services exports increased to $65.1 billion from $56.8 billion and imports rose to $66.4 billion from $65.80 a year ago. 

Overall international trade deficit shrank to $1.2 billion from $8.9 billion a year ago in January.