USD/JPY: Export surge and policy watch shape Yen – BNY

BNY’s Head of Markets Macro Strategy Bob Savage reports Japan’s exports posted their biggest rise since 2022, yet the Japanese Yen barely reacted, with USD/JPY slightly lower. Trade data show strong demand from Asia and Europe but weaker U.S. exports, while Japan also plans major energy and minerals investment in the United States, underscoring deepening economic ties and potential implications for flows and the Yen.

Stronger exports, muted Yen reaction

"Provisional Japanese trade data for January 2026 show exports at ¥9.19tn, up 16.8% y/y (from ¥7.87tn in January 2025), in the biggest increase since November 2022 (20% y/y)."

"Exports to Asia rose 25.8% y/y, led by China (+32.0%) and Taiwan (+35.3%), with Western Europe up 25.5% y/y, while exports to the U.S. were down 5% y/y."

"Japan plans to invest up to $36bn in U.S. oil, gas and critical mineral projects, the first tranche of its $550bn commitment under the trade agreement it struck with President Trump."

"These projects are designed to build resilient supply chains and promote mutual benefits between Japan and the U.S. They are expected to generate significant economic benefits, including power generation, crude oil exports and advanced industrial production, and are seen as a key step forward for the trade and economic pact between the two countries."

"A Japanese accounting group is proposing easing rules on how life insurers book paper losses on government bonds. The change would allow bonds held to match long-term policies to be treated as held to maturity, avoiding impairment accounting if conditions are met."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)