Japan's exports jumped 7.4% in June

Thanks to these three markets.

According to BBVA Research, exports rose for a fourth consecutive month, by 7.4% y/y in June (consensus: 10.0%) on rising demand from the US, EU and China, boosted by competitive gains from the yen’s weakness. 

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Imports, meanwhile, rose by 11.8% y/y (consensus: 13.8%) from 10.1% in May, resulting in a trade deficit of USD 1.8 bn. Recent trade outturns have been watched as an indicator of the effectiveness of government steps to stimulate GDP growth ("Abenomics").

In this regard, yesterday’s monthly economic assessment by the government was upbeat, noting "the economy is picking up steadily and shows some movements on the way to recovery."

Optimism has also been boosted by the government’s victory in last Sunday’s upper house elections. While signs are positive, there is, however, still a long road ahead, as investment remains weak, doubts persist about the structural reform agenda, and the 2% inflation target will be difficult to achieve by early 2015 as planned.