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Japanese Trade Implosion Sends Futures To Lows

Submitted by Tyler Durden on 08/21/2012 21:47 -0400

Somewhat disastrous trade balance data from Japan - with exports dramatically worse-than-expected (EU exports -25.1% YoY) and imports worse-than-expected (which will come as no surprise to any ZH reader given Europe's depression and our discussion of world trade here) - has crushed JPY crosses overnight (especially AUDJPY) which is exactly what we said at the close today was required to extend today's equity weakness. Sure enough, S&P 500 futures are down over 6 points from the close now - and trading below day-session lows.

For those too lazy to click on the hyperlink above, here again is the chart we showed earlier in the year when we gloated over the now rotting carcasses of decouplers everywhere (looks like decoupling has been "greenshot" again, hopefully this time for good), which explains why without a healthy Europe there can never be a global recovery:

Japan Exports missed by the most in a year - pretty much to their lowest since 2009. Stunningly, European exports are -25.1% YoY!

which sparked AUDJPY (and carry FX in general) to slump...

which is implictly dragging S&P futures down - below day-session lows (on decent overnight volume)...

Charts: Bloomberg

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Tue, 08/21/2012 - 21:50 | 2726029 Stoploss

But, but, We're so fucking stupid, how could ZH possibly come up with this??

Oh right, turns out we're not. ;)

Wed, 08/22/2012 - 00:06 | 2726296 DoChenRollingBearing

Our company in Peru (Ameru Trading del Peru S.A.) is just completing a big order for bearings from Japan. Hey, we're doing out part!

[If anyone wonders why we do not buy American bearings, it's because they DO NOT WANT to sell to us! True]

Tue, 08/21/2012 - 21:57 | 2726042 fonzannoon

exports to the US rose?

Tue, 08/21/2012 - 23:56 | 2726289 otto skorzeny

I'm guessing auto sales from pent-up demand after tsunami plant shut-downs

Tue, 08/21/2012 - 22:03 | 2726054 malikai

USDJPY's coming in very nicely: http://www.quantsig.net/img/fx_usdjpy.png

http://blog.quantsig.net/2012/08/20/is-usdjpy-reversing-from-last-weeks-...

Tue, 08/21/2012 - 22:03 | 2726061 westboundnup

Sombitch

- Buford T. Justice

Tue, 08/21/2012 - 22:24 | 2726117 Chappy

was just watching that tonight

Tue, 08/21/2012 - 22:04 | 2726065 DeFeralCat

This would also be three months after the Nuke accident and the tsunami so exports could not have been at full throttle last year. 25% below an already down number seems pretty signifcant to say the least.

Tue, 08/21/2012 - 23:56 | 2726288 Zgangsta

Fortunately for Japan, Q3 2011 also featured power conservation measures as well as the flooding in Thailand that dramatically impacted parts supply, giving them a much smaller target to match for Q3 2012.

Wed, 08/22/2012 - 00:01 | 2726297 DoChenRollingBearing

+ 1

Good observation FeralCat.

Tue, 08/21/2012 - 22:09 | 2726080 Phroneo

I wonder what will trigger the start of a sovereign crisis in Japan. Could it be within a year or maybe many as they are surely going to opt for destroying their nation and people with hyperinflation before any default.

Tue, 08/21/2012 - 22:10 | 2726081 e1618978

I understand why the yen is down, but why would AUDJPY be up? Whatever is bad for Japan is also bad for Australia (maybe more so). If Europe is importing less, China will take it on the chin, which will take out both Japan and Australia.

Wed, 08/22/2012 - 04:48 | 2726486 Negro Primero

"The impact of the Eurozone debt crisis is now having a pronounced effect on Japan's export industry. Exports to the EU fell by -25.1% y/y while those to China dropped -11.9% y/y"

Source:UBS

Tue, 08/21/2012 - 22:15 | 2726093 max2205

You didn't cause this crash, the govt did. Got it

Tue, 08/21/2012 - 22:17 | 2726101 Xibalba

Tony Scott suicide = Prius

Tue, 08/21/2012 - 22:58 | 2726192 CrimsonAvenger

No, if celebrities were killing themselves because they had shitty eco-cars, Ed Begley Jr.'s brains would be splattered all over the place.

Tue, 08/21/2012 - 23:59 | 2726284 otto skorzeny

Dumbasses-I still laugh when I see some wanna-be redneck suburban soccer dad put $120 on his credit card to fill up his Dodge Ram at the gas station. Funny thing- the guys that I know that own them NEVER haul anything around in them-other than their fat-assed wives and obese kids. I've carried more lumber in my Toyota Camry w/ fold down seats. I guess all these "US Patriots" support terrorism by buying massive amounts of foreign oil

Tue, 08/21/2012 - 22:23 | 2726116 chump666

iron ore: USD106 a tonne

China is grinding to a halt...with inflation on top.

Tue, 08/21/2012 - 22:29 | 2726125 DeFeralCat

All the charts: global industrial production, dry baltic, Japan exports, money velocity in US, European GDP are all showing preciptous (sic) drops. This may unravel pretty quickly. This would be like holding up a stop sign at the Indy 500 asking the economy not to slow. There is no amount of stimulus that can stop this momentum. And with an election in 80 days. Wow.

Tue, 08/21/2012 - 23:01 | 2726202 chump666

You missed out the HFTs sending sell/cut orders en masse. Since the market, humans that are left, know their bs trading pattern (fleecing).

We had it coming.

Wed, 08/22/2012 - 04:49 | 2726485 dubbleoj

I guess we know who'll be president then.

Wed, 08/22/2012 - 06:36 | 2726551 Winston Churchill

TPTB powers of levitation are goimg to be sorely tested.

They seem determined to keep the SHTF moment until after the election.

I can only surmise its to have some "mandate' for what they are planning.

Tue, 08/21/2012 - 22:28 | 2726123 fourchan

its bad when the bullshit numbers cant even be propped up any longer.

Tue, 08/21/2012 - 22:28 | 2726124 Let The Wurlitz...

"without a healthy Euorpe"? We dont have a healthy America.

Tue, 08/21/2012 - 23:58 | 2726293 otto skorzeny

we're DECOUPLED- geez- don't you watch CNBC?

Tue, 08/21/2012 - 22:34 | 2726131 Cult_of_Reason

Also the odds of Israel attacking Iran have spiked up exponentially lately – the war is inevitable.

http://video.cnbc.com/gallery/?video=3000110812&play=1

Wed, 08/22/2012 - 08:58 | 2726806 Optimusprime

When will we stop fighting for Israel first?

Tue, 08/21/2012 - 22:41 | 2726153 vertexa

An epic sell-off tomorrow?

Tue, 08/21/2012 - 22:46 | 2726163 DeFeralCat

Nope, it is just another data point in a far away land. The bots all have to turn together and this is still not enough. Profit-taking, yes.

Tue, 08/21/2012 - 23:20 | 2726230 Nobody For President

Dive baby:

http://www.youtube.com/watch?v=07P0mXOjKBk

Tue, 08/21/2012 - 23:58 | 2726294 otto skorzeny

short squeeze-today was just some chum in the water

Tue, 08/21/2012 - 22:47 | 2726165 Iam_Silverman

OK, I'll do my part to help out. It will be sushi for lunch tomorrow!

Tue, 08/21/2012 - 22:57 | 2726190 buzzsaw99

radioactive sushi? is there any other kind?

Tue, 08/21/2012 - 22:56 | 2726188 GrinandBearit

Bullish.

The futures will be even or green by 8am.

Tue, 08/21/2012 - 23:11 | 2726216 BigInJapan

Which, once this all pans out, will likely be pointed to as one of many indications that Japan was already dying under the porch when Fukushima happened.

Wed, 08/22/2012 - 00:05 | 2726303 DoChenRollingBearing

+ 1

I got the impression when I was visiting Osaka (May) that the Japanese are resigned to a slow and "blah" (at best) economy for the foreseeable future. My host told me that the children are not studying like they used to...

Wed, 08/22/2012 - 01:47 | 2726390 BigInJapan

Study?

HA!

Find a single 30 year old Japanese man today and ask him where studying got him. More likely than not it got him a temp job.

Do Chen, you were in Osaka - outside there and Tokyo, it's like economic purgatory.

Tue, 08/21/2012 - 23:16 | 2726221 divide_by_zero

Yeah but Japan's export of radionuclides has dramatically increased

Tue, 08/21/2012 - 23:24 | 2726238 Aquaman

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Tue, 08/21/2012 - 23:26 | 2726241 Cursive

Maybe this data pointwill push the market over the edge. Maybe not. It could have been hundreds of data points since last summer, but, heh, ignorance is stock market bliss.

Tue, 08/21/2012 - 23:55 | 2726285 JackT

B A N Z A I !!!!

Wed, 08/22/2012 - 00:04 | 2726301 q99x2

Hell with that recovery crap. We're moving on to revolutions and world war. This markets been killing everyone as it is. Enoughs enough.

Wed, 08/22/2012 - 00:17 | 2726308 DeFeralCat

Folks, I don't know. The data points are starting to add up. We are a Greece default, a German nein on Spain or a major US data point away from a major sell-off. I am going to speculate that it has to be a data point in the US that is obvious that Bernake printing is not a game changer. Personally, I think it is my cat blowing gas but the bots need something dramatic in unemployment, GDP, industrial production or durable goods.

Wed, 08/22/2012 - 02:19 | 2726408 Pareto