It is now conceivably just possible that the bottom of Asia's worst export slump in many years has been reached at last. Exports across the region, including Japan, for the last six months of last year were down 6.5 per cent in US dollar terms but on this six-month average basis the worst point was October, with an 8.5 per cent decline. Admittedly this still does not say exports are growing, but it is the change in the longer-term trend of year-over-year percentage change that is the key indicator. It suggests that the momentum has been reversed at last. Trade figures for countries that have reported later data seem to confirm it. There are several other factors to take into account here. The first chart shows the trend in US dollar terms because the US dollar remains the currency of international trade, however much euro-boosters may like this to change. Some Asian countries, for instance, report their trade figures only in US dollar terms and give no local-currency equivalent. But Asian currencies have obviously collapsed against the US dollar since mid-1997, and this can distort things considerably. In local-currency terms, some countries have actually experienced an export boom over the past 18 months, so much so that the ratio of exports to gross domestic product has actually risen for the region overall. It is an interesting side-note, but little more than that. Most people settle on the US dollar as the benchmark for measuring trade value. This benchmark, however, is also not entirely satisfactory at the moment. The difficulty is that the world is in a period of pronounced US dollar deflation in foreign trade. Export and import prices are falling. It is a much more severe decline than consumer-price indices show. It means in some cases that the volume of exports may actually be rising while this deflated value of exports is declining. The difference has been exacerbated in Asia recently by desperate manufacturers cutting prices to keep needed foreign-currency revenue flowing in and by foreign buyers who demand such price-cuts because they reason that local manufacturing costs have fallen along with fallen local currencies. Volume-of-trade statistics are not published in all Asian countries but, where they are, they show profound differences between the volume and value of exports. One example is South Korea, as the second chart shows. In US dollar terms, exports were declining by 3.7 per cent on a six-month average basis in January, not so bad as three months earlier but still down. In volume terms, however, exports were rising by 10.7 per cent in October, the latest month for which figures are available. It is a safe bet that the figure is even higher now. So in fact the US dollar way of looking at trade, even if it now offers some hope, still presents the worst picture at the moment. In volume terms, exports have undoubtedly done better and in local-currency terms there has been a boom. There is not much good news for Hong Kong in this, however. On all counts, in value or volume terms, in total exports, re-exports or domestic exports, the latest figures show a steep and continuing decline.