Forex - USD/JPY slightly higher after trade balance data

The U.S. dollar traded slightly higher against the Japanese yen during Wednesday’s Asian session following the release of June trade data out of Japan, the world’s third-largest economy, 

In Asian trading Wednesday, USD/JPY rose 0.09% to 99.54. The pair was likely to find support at 98.88, the low of July 16 and resistance at 100.61, Monday’s high. 

Earlier Wednesday, data showed Japan’s trade balance was in deficit for a 12th consecutive month. Japanese exports rose 7.4% last month, but that was below the 10.3% increase analysts expected. 

However, the weak yen is also increasing the cost of energy imports to resource-starved Japan, leading to another trade deficit. Still, first-quarter data showed Japan was the fastest growing major economy in the world. 

Exports to China rose 4.8% while exports to the U.S. surged 14.6% compared with 16.3% in May, according to the data. China and the U.S. are Japan’s two largest export markets. Imports rose 11.8%, but that was below the 13.6% increase analysts expected. Japan’s overall trade deficit was JPY180.8 billion. Analysts expected a deficit of JPY160.6 billion. 

Traders will now turn their attention to China’s PMI reading, due out later in the Asian session. The number is HSBC's flash estimate of its China July. Last month, the HSBC PMI fell to a nine-month low of 48.2. Readings below 50 indicate contraction. 

Elsewhere, NZD/JPY rose 0.15% to 79.66 after New Zealand reported a June trade surplus of NZD414 million, far better than the NZD100 million analysts expected. 

AUD/JPY added 0.15% to 92.58 while EUR/JPY inched up 0.05% to 131.59.