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Japanese August Trade data was released this morning, with export levels registering at a year-over-year decline of 36%. This is the 10th consecutive month in which exports have shown a decline of greater than 25% from the same month in the prior year.

There were some slender positive data points in the otherwise abysmal data, including Motor vehicle exports headed for China which turned positive on a year-over-year basis at 0.53%, although shipments to “The Client in total still declined by 27% over last August. At only slightly more than 5% of the total (greatly diminished) car shipments heading abroad, not enough cars are heading to China to offset the slack demand elsewhere and total vehicle exports came in at -49.8% Y/Y, a marginal sequential improvement after the seven prior months of levels lower than -50%.

We have maintained a short position in Japanese equities via EWJ since the first week of July, sticking to our conviction as the data emerging has continued to indicate nothing but stagnation and frustration for the land of the rising sun regardless of stimulus band aids concocted by the last administration (and with eth ones being proffered by the new government looking equally impotent).

Andrew Barber

Director

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