Nikkei 225 opens flat at 60475.01 as yen weakens past 158 per dollar

Japan's Nikkei 225 was little changed in early trade on November 11, standing at 60475.01 at 09:15 Tokyo time. The index was up 0.03% from the previous close of 60459.58.

The dollar stood at 158.74 yen, up from 157.90 in the previous session.

What happened

The Nikkei 225 gained 15.43 points from Tuesday's close, a flat start for the Tokyo morning session. The session runs from 09:00 to 11:30 and resumes from 12:30 to 15:30 Tokyo time.

USD/JPY was at 158.74 at 00:30 UTC, a rise of 0.84 yen or 0.53% from 157.90. The yen was therefore weaker against the dollar than at the previous close.

Chinese trade data for October, released on Tuesday, set the regional tone. Imports rose 41.6% year on year, against a 32% estimate and 31% in the prior reading. Exports grew 35.2%, against a 33.5% estimate and 36.3% previously.

China's trade surplus came in at 105.28 B, against a 125.8 B estimate. The previous reading was 133.53 B.

Why it matters

China is a major trading partner for Japan and for much of Asia. Import growth of 41.6% points to strong demand for goods entering the country, which matters for regional exporters and supply chains. Export growth of 35.2% was slightly slower than the 36.3% of the previous reading.

The smaller surplus reflects faster import growth. Imports rose more quickly than exports, which narrowed the gap between the two.

The yen's move is relevant for Japanese companies with overseas sales, because exchange rates affect how foreign earnings are converted into yen. A weaker yen also raises the cost of imported goods for Japanese buyers. For investors, the flat Nikkei opening shows that the index has so far absorbed both the currency move and the Chinese data without a clear direction.

What to watch next

The Tokyo morning session continues until 11:30, followed by the afternoon session from 12:30. Market participants will see whether the index holds its flat start as trading develops.

The yen is the other point of attention. USD/JPY at 158.74 can change during the Asian day. Further Chinese data and regional trade figures will show whether the strong import growth continues in the coming months.