Nikkei jumps on machinery orders, China's trade surplus falls

Japan's stock market is having a good run of late. Strong machinery orders kept it going yesterday. AP reports:

Japan's benchmark stock index notched its biggest one-day point gain in more than three years Tuesday as traders bought steel and bank issues on upbeat machinery order figures.

The Nikkei 225 index jumped 328.97 points, or 2.49 percent, to 13,556.71 points on the Tokyo Stock Exchange, registering the biggest single day point gain since Aug. 7, 2002, when the index rose 333.38 points...

Traders bought steel and banking issues, with market sentiment cheered by robust August core machinery orders, which rose 8.2 percent in August from July, beating market expectations of a 2.5 percent rise.

Elsewhere in Asia, China saw its trade surplus fall in September.

China's trade surplus stood at US$7.57 billion in September, the smallest monthly figure since May, said the latest statistics published yesterday by China's General Administration of Customs.

Exports reached US$70.2 billion last month, up 25.9 per cent year-on-year, while imports reached US$62.6 billion, up 23.5 per cent from the same month last year.

Stalemate in textile trade talks between China and the US may put a damper on further Chinese export growth. Nevertheless, a research group has raised its 2005 growth forecast for China.

A government research institute raised China's growth forecast this year to 9.2 percent but called for an easing of monetary and fiscal policy to boost domestic demand as the economy slows in 2006.

The Macroeconomic Research Institute under China's top planning body, the National Development and Reform Commission, increased Tuesday its forecast for gross domestic product (GDP) growth from 8.8 percent.

The institute predicted the economy will expand more slowly next year, possibly entering an "adjustment period," with GDP rising by about 8.5 percent.

Meanwhile, the UK reported its trade balance for August.

Britain posted its largest ever trade deficit in August following huge insurance claims to be paid by Lloyds of London after Hurricane Katrina.

The balance of trade in goods and services was £5.3bn in the red compared with £3.9bn in July, pushed lower by the Office for National Statistics's estimates that the cost of Hurricane Katrina will force Lloyds to pay-out £1.4bn to the owners of property destroyed by the storm.

In the three months to August, the value of exports and imports grew by 7.3 and 7.4 per cent respectively compared with the same three months a year earlier... After adjusting for inflation, the growth in the quantities of exports and imports was more favourable since the prices of goods charged to EU customers have risen faster than the prices of imports from the EU.

Over in the United States, the Federal Reserve released its minutes of the September FOMC meeting. William Polley dissects the minutes.