Nikkei tests lows despite exports gain

JAPANESE stocks were testing two-month lows today as investors ignored stronger signs of an upward trend in the country's exports in April.

Japan's trade surplus rose 21% in April, and for the first time rising exports, rather than falling imports, drove the improvement. The exports lift came from Asia as well as the US but the recently strong yen has weakened optimism about this becoming a long-term trend.

There was some disappointment that the surplus of 1.085 trillion yen (£587bn) was slightly below average expectations, while the continuing fall in imports underlined the lack of consumer demand in Japan. Concern over the effect of persistently thin trade on the Tokyo stock market sparked a wave of selling that shaved almost 4% off securities stocks. Market leader Nomura led the falls with a 4% slide, as analysts backtracked on earlier bullish forecasts after the strong trade in the opening months of the year.

Trading also dried up in Hong Kong ahead of the launch of a large tranche of the government's tracker fund, which duplicates the Hang Seng index.

The fund was set up to dispose of a massive investment in Hong Kong stock as part of a market support operation in 1998, and the prospects of the latest sale pushing blue-chips down to bargain levels kept investors on the sidelines. The Hang Seng index fell 28.64 points to 11,119.33.

In Taiwan, technology stocks responded strongly to Nasdaq's advance, and the Weighted Average bounced up more than 3%, putting on 162.27 to 5562.23. Chipmakers also benefited from the 3.5% overnight rise on the closely watched Philadelphia Semiconductor index.

Singapore's tech sector was also lifted by US action, but with trade thin, and investors looking for quick profits, early gains soon faded and the Straits Times index slipped 6.05 to 1639.94.

Continuing scepticism about the strength of the US recovery and worries over real earnings figures on Wall Street kept Australian investors out of the market. Those that did venture to deal sold stocks in recently strong banks and continued to dump News Corp shares, which have slid steadily since it announced its move into the Italian pay-TV market. Major resources counters moved ahead, with BHP Billiton up more than 2%. The All Ordinaries index lost 12.5 points to 3264.7

Indonesian stocks shone after the International Monetary Fund agreed to continue to support the economy. The Jakarta Composite index jumped 16.11 to 540.08. Thailand's SET index rose 2.84 to 426.45 and the Kuala Lumpur Composite rallied 2.82 to 753.39. South Korean markets were closed for a public holiday.

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