The strong domestic economy should cushion the impact of an anticipated slowdown in Hong Kong's trade growth this year.

Trade is a drag (on growth) and that tends to hit manufacturing harder than the rest of the economy.

There's still profit taking pressure but I expect the index to trade around the 17,500 level today.

Because the economy is so strong, import growth is also very strong, and that import growth is eroding trade surpluses. Surpluses of more than a billion a month might be over.

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.