Tue, Mar 20, 2018 - Page 10 News List

Global markets slide amid Japan, US instability fears

TROUBLE AT THE TOP:Shinzo Abe’s popularity in polls has fallen to 31% on suspicions of cronyism, while in the US, investors fear more staff turnover at the White House

AFP, HONG KONG

Tokyo yesterday sank as Japanese Prime Minister Shinzo Abe’s political future hangs in the balance over a cronyism scandal, while Asian traders moved cautiously before a crucial US Federal Reserve meeting.

After fluctuating last week on worries about a possible global trade war and US President Donald Trump’s removal of moderate voices in his cabinet, regional equities were struggling to maintain a run of gains.

Investors were also keeping an eye on Washington after another outburst by Trump against a probe by US Special Counsel Robert Mueller into claims of Russian meddling and collusion with Trump’s campaign in the 2016 presidential election.

There are fears in some quarters that Trump is planning to fire Mueller.

If he did, “all heck could break loose on markets,” AxiTrader chief market strategist Greg McKenna said.

In Japan, the Nikkei finished 0.9 percent lower as Abe and Japanese Minister of Finance Taro Aso are embroiled a scandal over the cut-price sale of government land for an elementary school to a supporter of Abe.

The Japanese Ministry of Finance has admitted altering documents related to the deal.

A weekend poll by the Asahi Shimbun found that public support had nosedived 13 percentage points from a month ago to 31 percent, the lowest since Abe took power in December 2012.

Abe has denied any wrongdoing.

Hong Kong was up 0.2 percent in the afternoon, but CK Hutchison Holdings was down 1.5 percent, after the territory’s richest person and investment tycoon Li Ka-shing (李嘉誠) on Friday last week announced that he would step down as chairman.

Elsewhere, Sydney added 0.2 percent, but Singapore fell 0.1 percent, Seoul dropped 0.8 percent and Manila lost 0.8 percent. There were also losses in Bangkok, Jakarta and Wellington.

The key event this week is the Fed’s next policy meeting, which will be the first for new Fed Chairman Jerome Powell. The bank is expected to raise interest rates again, but Powell’s remarks will be closely followed for clues about future increases, with some predicting three more this year in light of an improving economy.

“Markets are struggling to stay positive given the torrent of potential headwinds,” OANDA Asia-Pacific trading head Stephen Innes said. “Whether it’s the White House’s revolving door, an escalation of a global trade war or Japan’s brewing political scandal, markets are grappling to find an equilibrium.”

However, “when you toss in the prospect of a more hawkish Fed, it’s not surprising risk sentiment continues to trade poorly,” Innes said.

This story has been viewed 1398 times.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top