Barclays on Japan’s “digital deficit,” i.e. payments to overseas technology companies like Netflix and Amazon.
Analysts say its become large relative to trade and travel in the country’s current-account balance and its continued expansion will pressure the yen
- reached ¥4.8 trillion ($34.7 billion) last year, almost 90% of Japan’s services account deficit
- “This digital deficit appears to reflect a structural change in the behavior of consumers and businesses, suggesting it will persist,”
- “That implies an increase in yen-selling pressure.”
But. say the Barclays folks, they expect the increase in inbound tourism to Japan to counteract the weakness this year. Combined with lower commodity prices and their expectation that the BOJ will tweak policy they forecast USD/JPY to 123 in Q1 of 2024.
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Info via Bloomberg (gated). Its not unusual for media reporting of such developments to ring the bell for a (at the least short-term) reversal.