Japan drags Asian markets lower Australia reports trade deficit

Japan’s benchmark Nikkei 225 fell by 2.1% today, leading Asian markets lower.

The market fell as Japanese airlines canceled hundreds of flights, some train services were halted and thousands of workers were sent home early due to some of the strongest winds in more than 50 years hitting Tokyo.

Of the corporate movers, Asia’s largest clothing retailer – Fast Retailing – sank 4.1% after Credit Suisse said sales at its Uniqlo stores failed to recover from last year’s earthquake. The Japanese Yen gave back some of its recent gains against the US dollar, which was last buying 82.62.

In economic news, Australia’s trade position fell below analyst expectations again today, reporting a deficit for the second consecutive month. Imports outgrew exports by $480m, from a revised $971m deficit in January according to the Bureau of Statistics.

Market consensus was for a surplus of around $1.1bn. The data echoes the Australian Reserve Bank’s (RBA) comments yesterday that the terms of trade have probably peaked but should remain at healthy levels for some time.

The numbers were impacted by a 16% fall in coal shipments and a 10% decline in metals – both metrics which should improve in coming months. The Australian dollar continued its slide, last buying around 1.0278 against the US dollar with an intra-day low of around 1.0264.

In commodities, copper was steady after yesterday’s declines, to last trade at around US$3.86/lb. Gold seems vulnerable at around US$1645/oz following last night’s Federal Reserve comments.

Australian gold producers were among the biggest losers on the ASX200 index today, with Saracen and Silverlake Resources down by around 5% going into the closing minutes of trade in Sydney. Regis and Integra – both Western Australian gold producers – were also down by around 4%.