It suggests the drag on the economy from the trade deficit in the third quarter will not be as great and could help revise up third-quarter GDP a bit,

Today's numbers show that consumers are not very optimistic about the economy. As a result, we will see consumer spending reduced until we see some relief on energy prices. If we don't get some relief, it looks like it will be a very weak holiday season.

I think the headline number is a bit misleading. It doesn't suggest that the economy is in trouble. Consumer durables production is looking solid, so it's looking like there's still going to be strong first quarter GDP growth.

The rhetoric will be stepped up on trade.

The trade surplus figures showed strong exports and domestic demand. This shows the economy is robust enough to withstand a rate increase later this year, supporting the yen.

The latest trade figures confirm that Japan's economy is recovering steadily and modestly.