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Financial In Market China has become the world's number three trading power, behind the United States and Germany.

This week, economic data out of Japan is expected to reflect improvements in third quarter capital spending and labor cash earnings.

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The inflation data reinforces the consensus that the Bank of Japan will keep interest rates on hold while waiting for clarity on the U.S. economic outlook.

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The IMF said yesterday that Japan's economy will grow 2.3% in 2007.However Japanese economic growth for 2008 is projected at 1.9%.

Trading Jan 17, 2005 (AXcess News) Tokyo - China has become the world's number three trading power, behind the United States and Germany. It reported 35-percent growth in foreign trade in 2004, and with its economy on a roll and its refusal to let its currency rise in value, trade growth is likely to stay in double digits for some time. That makes many people in Japan nervous.

For the past 3 days, off despite no meaningful data being released from Japan. It wasn't only the dollar strength that sent the currency lower, but also utterances made by the Bank of Japan governor, Fukui, saying the BoJ is in no rush to raise interest rates. With him saying this, and with disappointing economic data coming from Japan lately, we are unlikely to see a significant strengthening of the JPY. There is no economic news scheduled from Japan today, and we expect any price movement to be dictated by the European calendar. Expect some basing at the 118 level against the USD, great opportunity for those who like trading tight ranges.

Trading Financial System China's gain has been Japan's loss. China's trade surplus with the United States is running at about $150 billion a year according to estimates by several U.S. trade experts. It is now the United States' fourth-largest trading partner, behind Canada, the European Union and Mexico - and ahead of Japan.But there is an upside for Japan to China's economic boom. Improved infrastructure and a desire for foreign direct investment in China have prompted Japanese companies to move factories there - lowering their labor costs and allowing them to stay competitive.The rising tide of Chinese exports to Japan, however, is causing concern here. Japanese officials accuse China of dumping some products in Japan - the type of accusations Washington used to lob at Tokyo in the 1980s and 1990s.But the chief economist of the Tokyo branch of HSBC Securities, Peter Morgan, said Japan should think twice about fretting over imports of such things as cheap Chinese spring onions, shiitake mushrooms or bath towels.

Yesterday, actively traded currencies. The JPY declined to 166.74 per euro, and may fall to 167.50 per euro today. Australia's dollar strengthened 1 percent against the JPY while New Zealand's currency gained 2%. In addition, yesterday saw Japan's index of leading economic indicators published. The index dove to zero for the month of September after a mark of 27.3 in August. The index hit zero for the first time since December 1997.

Day Trading "These sorts of trade spats are basically symbolic and don't really have material effect on the overall trade relationship. One of the things the Chinese did when the Japanese put on these trade restrictions is to say 'OK, we'll restrict your car exports to China' and hit them where it hurts. It's very much of a two-edged sword," he said.Advertisement

Forex Financial Trading The While China easily beats Japan when it comes to labor costs, the world's most populous country still lacks competitive technology.

Fortune Make Option Trading Professor Xu Peng, at the Institute of Comparative Economic Studies at Tokyo's Hosei University, said that means Japanese products will remain competitive for a long time, until China improves its technological capabilities.

Science Of Financial Market "Of course, many Chinese companies, they still copy products like automobiles from Western companies. I think that in technology, Western companies, including Japanese companies, still have very, very strong competitive technological capabilities," said Xu Peng.Source: Voice of America

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