"By region, exports to the European Union plunged 25.1 per cent year-on-year amid the debt crisis. Imports from the EU rose 10.6 per cent, leaving Japan with a deficit of 95.2 billion yen with the embattled economic zone.
Exports to China fell 11.9 per cent against a 3.3 per cent rise in imports, making Japan's deficit with its biggest trading partner nearly double that in June at 250.1 billion yen."
Looks like Hugh Hendry's CDS are moving steadily into the money. The dominoes are Europe, China, Japan - in that order. To me, it looks like the narrative I have discussed continues to play out. Look for short term appreciation of the yen as Japanese corporates repatriate cash.
Meanwhile, the market rallies and oil breaks $100/bbl.....