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.
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to
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