ForexLive Asia Wrap: Chinese Trade Data, Following a Very Strong January, Comes in Strong for February

New Zealand Q4 Manufacturing Sales 0.0% q/q (vs. +1.6% prior) Japan Q4 GDP 0.0% q/q (vs. +0.1% expected) Japan Q4 GDP annualized +0.2% y/y (vs +0.2% expected) Japan January Current Account Total -364.8b yen (vs. -611.5b yen expected) Japan Q4 Nominal GDP -0.3% q/q (vs. -0.3% expected) Japan Q4 GDP deflator -0.7% y/y (vs. -0.6% expected) Japan February Bank Lending (ex-trusts) +1.9% (vs. +1.6% prior) China February Trade Balance is +$15.25b (vs. -$6.9b expected) – much better than expected China February Exports +21.8% y/y (vs. +8.1% expected) China February Imports -15.2% y/y (vs. -8.5% expected) China's commerce minister Chen said China FDI is forecast to be at $110b this year China iron ore imports fell to a 4-month low in February, down 14% m/m (down 16.2% y/y) North Korea voided its non-aggression pacts with the South, and cut the hotline between Pyongyang to Seoul With another strong Chinese trade performance this month the veracity of the data (that old chestnut) is again being questioned, as is the impact of the Chinese New Year. One proposed method of dealing with the new year effect is to average out the January and February figures, this gives exports +23.6 % (compared with +6.8% in the same period in 2012) and imports +5% (compared with a 7.9% increase last year). Similarly, for the iron ore imports (see bullets, above), averaging the data over January and February gives a decline of 1.5% y/y Very little activity indeed in GBP and EUR after an active overnight session – ranges were tiny. AUD/USD, however, had a weak day, losing ground down to 1.0235/40. It went into the Chinese trade data weak and, after a little volatility over the release, lost a little more ground. There is concern that the lower import numbers in China are showing weaker domestic demand than previously thought. NZD lost ground on the day also. Yen again the most active, although it had nothing like the range seen in the prior Europe and New York timezones. USD/JPY traded as high as 95.44 before the offers ahead of much-discussed barriers at 95.50 held it. EUR/JPY as high as 124.99