US trade deficit shrinks to $43bn in Feb

THE US trade deficit edged lower in February after a big jump in January, government data released on Friday shows.

The Commerce Department reported the trade gap shrank to $US43 billion ($A41.4 billion), down from the revised $US44.5 billion in January.

The decline, which came after a large 16.7 per cent deficit increase in January, surprised analysts who had projected a deficit of $US44.7 billion.

US exports grew 0.8 per cent to $US186 billion, strengthened by the exports of industrial goods (up 4.5 per cent) and cars (up 1.6 per cent).

Meanwhile, US imports held steady at $US228.9 billion.

US imports of crude oil, which represent more than 10 per cent of imported goods by the US, dropped 5.6 per cent to $US23.6 billion.

But US imports of foreign cars rose 4.6 per cent between January and February to reach $US24.8 billion.

On a 12-month basis, the US trade deficit has dropped by 3.5 per cent.

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Tokyo stocks jump in early trade

TOKYO stocks have jumped by more than four per cent in early trade on Friday a day after the Bank of Japan unveiled fresh easing measures that sent the yen tumbling against the US dollar.

The Nikkei 225 index at the Tokyo Stock Exchange was up 4.68 per cent, or 591.08 points, to 13,225.62 several minutes after the opening.

The Bank of Japan (BoJ) embarked on a new era of huge spending Thursday by unleashing a flood of easy money in its boldest attempt to drag the economy out of a long spiral of deflation.

The yen slumped against the US dollar and bond yields hit a record low after new governor Haruhiko Kuroda unveiled a doubling of the money supply and vowed no let-up in the battle against falling prices.

A weaker yen helps Japanese exporters by making their products more competitive overseas.

"The increased appeal of Japanese shares to potential overseas investors, combined with renewed weakening of the yen should lift the market still higher," SMBC Nikko Securities general manager of equities Hiroichi Nishi told Dow Jones Newswires.

The BoJ said it would expand its asset-purchase program to include riskier bets such as exchange-traded funds (ETFs) and real-estate investment trusts. ETFs are similar to an index fund, but are market traded like stocks.

It will also buy longer-term government bonds, a move aimed at pushing down long-term interest rates to encourage companies and individuals to borrow instead of hoarding their cash.

The bank said it wanted to boost the monetary base -- the amount of currency in circulation including commercial bank deposits in BoJ reserves -- by 60-70 trillion yen ($A606.56 billion-$A698.02 billion) annually to 270 trillion yen by the end of 2014.

The yen fell further in Tokyo morning trade, with the US dollar soaring to 96.80 yen from 96.33 yen late Thursday in New York. The euro was at 125.16 yen from 124.60 yen.

In the United States, The Dow Jones Industrial Average rose 55.76 points (0.38 per cent) to 14,606.11.

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US welcomes Japan's trade move

THE United States has hailed Japan's plan to join the talks for the Trans-Pacific Partnership (TPP) free-trade zone.

"The United States welcomes Prime Minister (Shinzo) Abe's important announcement formally expressing Japan's interest in joining the Trans-Pacific Partnership negotiations," said Acting US Trade Representative Demetrios Marantis on Friday.

"Since early last year, the United States has been engaged with Japan in bilateral TPP consultations on issues of concern with respect to the automotive and insurance sectors and other non-tariff measures," he said in a statement.

"We look forward to continuing these consultations with Japan as the 11 TPP countries consider Japan's candidacy for this vital initiative in the Asia-Pacific region."

But the US Alliance for American Manufacturing, backed by the US auto industry, is critical of the idea of Japan joining the talks.

"We should welcome and encourage Japan's interest in freer trade, but let's not roll out the red carpet for their inclusion in the TPP," AAM president Scott Paul says.

"Japan's closed market, currency manipulation, and many other concerns stand in the way. It's not worth sacrificing American jobs and American manufacturing to secure a TPP agreement at any cost."

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Tokyo stocks up sharply in opening trade

TOKYO stocks jumped in opening trade on Thursday, taking a strong lead from Wall Street, which rose on upbeat economic data and the Federal Reserve chief's renewed commitment to loose monetary policy.

The Nikkei 225 index was up 1.45 per cent, or 162.89 points, to 11,416.86 in the first 20 minutes of trading.

The market was winning support from a weak yen and Fed chief Ben Bernanke's comments this week that the central bank would keep its monetary easing program in place until economic conditions improve, said Kenichi Hirano, market analyst at Tachibana Securities.

Tokyo's early rise also came as the government was set nominate the next governor of the Bank of Japan and his two deputies later on Wednesday, with Asian Development Bank chief Haruhiko Kuroda widely tipped to get the top job.

Kuroda is known as an advocate of loosening monetary policy to overcome slow growth, a stance that tends to win the support of investors and weaken the yen, which helps stocks by making exporters more competitive.

The Dow Jones Industrial Average reached its highest level in more than five years on Wednesday, boosted by Bernanke's comments and strong reports on the US housing market and orders for durable goods, which include long-lasting products such as cars and home appliances.

The blue-chip index rose 1.26 per cent to 14,075.37, its best finish since October 12, 2007.

In early Tokyo forex trading, the dollar was at 92.33 yen compared with 92.16 yen in New York on Wednesday afternoon.

"The Nikkei continues to take cues from the dollar/yen movements," Hirano told Dow Jones Newswires.

The euro bought $1.3147 and 121.34 yen, up from $1.3136 and 121.07 yen in US trade, as the common European currency gained ground following better-than-expected bond auctions in Italy.

Inconclusive national elections in the debt-hit nation had stoked fresh fears about eurozone stability.

Markets reacted little to government data that showed Japanese factory output for January rose a smaller-than-expected 1.0 per cent on-month.

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