Flash Notes

Japan ended 2015 with a small December trade surplus of JPY140.2bn, only its 3rd month of trade surplus in 2015 (andonly the 5th month of surplus since Jan 2012). And while Japan remains in an overall trade deficit position for 2015, the deficitwas narrowed significantly by around 80% to JPY2.83trn in 2015, from JPY12.81trn in 2014, largely thanks to the slump incommodity prices, especially that of energy imports. Exports worsened in December as it contracted for the 3rd straight month and ata more severe pace of -8.0%y/y (from -3.3%y/y in November and -2.2% in October) , and it was the worst y/y decline since September2012. The trade surplus instead was due to the sharp contraction in imports by 18%y/y (Bloomberg median forecast was -16.4%,while November imports contracted by a smaller 10.2%). The December import decline was the sharpest since October 2009. On anadjusted basis, Japan still recorded a surplus albeit smaller at