Steep decline in Nikkei 225
 
The Nikkei 225 index pulled back more than 3.6% over the past six trading session to close at 15,596 yesterday (8 October). This closing price also meant that the Japan benchmark is currently trading 0.4% lower than its 50-day moving average, suggesting short term weakness.
 
The Nikkei traded to its lowest level in more than a month yesterday morning before rebounding approximately 0.4% to trim part of its losses in the second half of the trading session.
 
Economic data this morning
 
This morning, Japan reported its Machine orders for the month of August. The actual figure came in at 4.7%, outperforming the 0.5% month-on-month increase estimated by Bloomberg’s survey of 26 economists. The machinery orders tracks the value of new machinery orders received during the reported month. An increase generally indicates that the business activity in the economy is expanding while a decrease will suggest contraction.
 
The Bank of Japan has also maintained their 2014 monetary policy base target to 270 trillion yen, in line with the estimated figure from Bloomberg.

Source: Macquarie Research - 9 Oct 2014