Investors in Asia reacted cautiously yesterday to the latest plan by the US Federal Reserve to unblock credit markets, with stock markets in the region showing mixed fortunes.
The gloomy outlook for the global economy weighed on sentiment, prompting profit-taking in some markets despite the Fed’s announcement that it would buy as much as US$800 billion in mortgage and asset-backed securities.
“The massive injection plan by the Fed is something that should have been done by the government in the first place,” said Seiichi Suzuki, a strategist at Tokai Tokyo Securities. “This is what investors had expected in the grim situation.”
Tokyo’s Nikkei-225 index ended 1.3 percent lower, weighed down by concerns about a stronger yen, and Sydney slipped 2.3 percent. But Seoul closed up 4.7 percent and Hong Kong’s Hang Seng was 3.4 percent higher by lunch.
Adding to jitters in Tokyo, Fitch Ratings downgraded Toyota Motor Corp by two notches to AA, warning that in the current slump “even the strongest player” no longer deserved its top rating.
In China, hundreds of laid off workers rioted amid a dispute over severance pay, smashing offices of a toy factory and clashing with police, state media said yesterday.
The unrest on Tuesday night in Guangdong Province, the heartland of China’s export-oriented light industry, was the latest in a series of protests that have flared up amid rising unemployment linked to the global economic crisis.
In a wobbly session on Wall Street on Tuesday, the Dow Jones Industrial Average rose 0.43 percent but the tech-heavy NASDAQ fell 0.50 percent.
The Commerce Department reported the US economy shrank at a 0.5 percent pace in the third quarter, in a revised estimate for gross domestic product that many analysts say is the start of a steep downturn.
In Brussels, draft legislation set to be unveiled Wednesday called for a “significant” two-year stimulus campaign to jolt embattled EU economies out of recession.
“Only through a significant stimulus package can Europe counter the expected downward trend in demand, with its negative knock-on effects on investments and employment,” the draft document said.
The draft did not say how much the stimulus package could be worth but commission chief Jose Manuel Barroso has said it should be at least about 130 billion euros (US$170 billion).
France for its part plans to inject 19 billion euros into key industries as part of a stimulus package to kick-start the French economy, Finance Minister Christine Lagarde said.
The dollar edged down against the yen as traders mulled the new push by the Fed to unfreeze credit markets — a move that unsettled some traders.
“It left us wondering if the Fed needs to do this much,” said Kenichi Yumoto, vice president of forex trading at Societe Generale. The dollar eased to ¥94.97 in Tokyo afternoon trade, down from ¥95.24 in New York late on Tuesday. The euro dropped to US$1.2969 from US$1.3063 and to ¥123.66 from ¥124.45.
North Korea tested nuclear-capable rocket launchers, state media reported yesterday, a day after Seoul detected the launch of about 10 ballistic missiles. The test comes after South Korean and US forces launched their springtime military drills, due to run until Thursday. North Korean leader Kim Jong-un on Saturday oversaw the testing of the multiple rocket launcher system (MRLS), the Korean Central News Agency (KCNA) said. The test involved 12 600mm-caliber ultra-precision multiple rocket launchers and two artillery companies, it said. Kim said the drill gave Pyongyang’s enemies, within the 420km striking range, a sense of “uneasiness” and “a deep understanding
RECOGNITION: Former Fijian prime minister Mahendra Chaudhry said that Taiwan’s New Southbound Policy serves as a stabilizing force in the Indo-Pacific region Taiwan can lead the unification of the Chinese people, Nobel Peace Prize laureate and former Polish president Lech Walesa said in Taipei yesterday, adding that as the world order is changing, peaceful discussion would find good solutions, and that the use of force and coercion would always fail. Walesa made the remarks during his keynote address at a luncheon of the Yushan Forum in Taipei, titled “Indo-Pacific Partnership Prospects: Taiwan’s Values, Technology and Resilience,” organized by the Taiwan-Asia Exchange Foundation with the Ministry of Foreign Affairs. Walesa said that he had been at the forefront of a big peaceful revolution and “if
North Korea yesterday fired about 10 ballistic missiles to the sea toward Japan, the South Korean Joint Chiefs of Staff (JCS) said, days after Pyongyang warned of “terrible consequences” over ongoing South Korea-US military drills. Pyongyang recently dashed hopes of a diplomatic thaw with Seoul, Washington’s security ally, describing its latest peace efforts as a “clumsy, deceptive farce.” Seoul’s military detected “around 10 ballistic missiles launched from the Sunan area in North Korea toward the East Sea [Sea of Japan] at around 1:20pm,” JCS said in a statement, referring to South Korea’s name for the body of water. The missiles
‘UNWAVERING FRIENDSHIP’: A representative of a Japanese group that co-organized a memorial, said he hopes Japanese never forget Taiwan’s kindness President William Lai (賴清德) yesterday marked the 15th anniversary of the Tohoku earthquake and tsunami, urging continued cooperation between Taiwan and Japan on disaster prevention and humanitarian assistance. Lai wrote on social media that Taiwan and Japan have always helped each other in the aftermath of major disasters. The magnitude 9 earthquake struck northeastern Japan on March 11, 2011, triggering a massive tsunami that claimed more than 19,000 lives, according to data from Japanese authorities. Following the disaster, Taiwan donated more than US$240 million in aid, making it one of the largest contributors of financial assistance to Japan. In addition to cash donations and
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