Japanese exports continued their decline for a ninth consecutive month in August on the back of escalating trade tensions between the US and China. According to data released by the Ministry of Finance, exports fell by 8.2% YoY in August; however, it was better than the 10.9% drop forecast by economists.

In terms of volume, which excludes the impact of exchange rate, exports declined by 6.0% YoY during the month, after having risen higher for the first time in several months during July. The continued slump is expected to weigh heavily on Japan’s export-reliant economy, which has been showing signs of a slowdown in economic growth. Recently, business spending estimates were also revised lower in the face of ongoing trade tensions.

For now, economic growth in Japan has been sustained over strong domestic demand and growth in the services sector. However, the upcoming sales tax hike to 10% proposed to come into effect in October could impact domestic demand and slow down economic growth further in the coming months.

On the release of this news, USD/JPY spiked higher momentarily but is back to trading somewhat steady a little lower. At the time of writing, the Guppy is trading at around 108.21.