This morning various economic data were released in Asia, most importantly data from China and Japan. China posted a record USD $63.3 billion trade surplus in January 2016, while Japan saw its gross domestic product (GDP) contract more-than-expected at 1.4 percent (y/y) in the fourth quarter of 2015. However, despite weak GDP growth data Japanese stocks managed to surge, while Chinese stocks tumbled after the record monthly trade surplus. How is that possible? And what about Indonesian assets today?
China's record USD $63.3 billion trade surplus in the first month of 2016 was mainly caused by tumbling imports into the world's second-largest economy and the world's largest trading nation. Imports into China fell by 18.8 percent (y/y) in US dollar terms, the 15th consecutive month of decline, while in yuan terms the decline was 14.4 percent (y/y). These figures show that domestic consumption and economic activity in China remain subdued.
Meanwhile, exports from China were down 11.2 percent (y/y) in US dollar terms in January 2016 or 6.6 percent (y/y) in yuan terms. Falling export figures indicate that China's decision to devalue the yuan in the second half of 2015 has not resulted in a significant boost for the nation's export performance. However, as the timing of China's (week-long) new year celebrations floats from year-to-year, the data may not fully reflect fundamental matters in the first month of the year.
On Monday the Shanghai Composite Index reopened after a week-long holiday due to Chinese New Year. By 11:15 am local Jakarta time, the index had fallen 1.57 percent to 2,720.03 points, responding to the weak trade data.
Meanwhile, Japan's GDP growth in Q4-2015 was disappointing. The country's economy contracted by 1.4 percent (y/y) as private consumption and exports slumped. In the preceding quarter Japan's economy had experienced a (revised) 1.3 percent (y/y) contraction. These data gave rise to renewed speculation about another round of monetary stimulus from Japan's central bank (last month it had already implemented negative interest rates).
Despite weak GDP data, Japan's Nikkei 225 Index had surged 6.38 percent by 11:40 am local Jakarta time on these stimulus hopes.
Indonesia's benchmark Jakarta Composite Index rose 0.53 percent to 4,739.53 points in the first trading session on Monday (15/02).
Indonesia announced on Monday it recorded a USD $0.05 billion monthly trade surplus in January after a USD $0.16 billion deficit in December. However, exports fell 20.7 percent (y/y) to USD $10.50 billion in January 2016 (the weakest figure since September 2009), while imports fell 17.2 percent (y/y) to USD $10.45 billion in the first month of the year.
The Indonesian rupiah continued to appreciate markedly, appreciating 0.74 percent to IDR 13,390 per US dollar after the news of January's monthly trade surplus (Bloomberg Dollar Index). Meanwhile, Bank Indonesia's benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) depreciated 0.04 percent to IDR 13,476 per US dollar on Monday (15/02).
Indonesian Rupiah versus US Dollar (JISDOR):| Source: Bank Indonesia
Mostly rising stocks in Asia today are also caused by the rally on European and American markets on Friday due to a surge in oil prices. Last Friday (12/02), the Dow Jones and Standard & Poor's 500 both rose 2 percent, while the Nasdaq gained 1.7 percent. On Monday (15/02) during Asian trade, however, oil prices were again under pressure with US benchmark West Texas Intermediate futures down 0.65 percent to USD $29.25 per barrel (after gaining 12.32 percent on Friday) and Brent down 0.51 percent to USD $33.19 per barrel (after a 9.35 percent gain on Friday).