In Japan, the trade surplus surged to a record high on an unadjusted basis in March, providing some suggestion that the yen is, indeed, undervalued. Macro Man has never disputed that the yen is undervalued; rather, he has claimed that the yen is not terribly undervalued against the US dollar. It was interesting to see that exports to the US were up only 2.4% y/y, while those to Asia and the EU rose 10% and 13.7% respectively. Yes, Virginia, exchange rates do eventually matter!
Macro Man is beavering away with a few research projects at the moment, some of which will hopefully bear fruit over the next couple of days. Yesterday's jitters feel a mile away, though tellingly the IBEX has mustered only flat performance after yesterday's shellacking, seriously lagging the rest of Europe. Whether this bodes ill for the future remains to be seen, though Macro Man can guarantee you that he was not the only person to send charts of Astroc, a company of which he had never heard until this week.
So, it's back unto the research breach, but Macro Man will sign off with a question for those readers who specialize in equities:
Why is it that of the few global equity markets that are underperforming the US, three of them (Japan, Hong Kong, and Taiwan) are in countries ostensibly well-placed to leverage Chinese growth to the hilt?