World markets appeared unimpressed yesterday with an action plan from international leaders to tackle the global financial crisis, as Japan became the latest major economy to sink into recession.
The G20 rich and emerging nations pledged to work together to restore global growth and overhaul the world’s financial system, but stopped short of announcing specific measures such as coordinated stimulus spending.
“In the midst of an emergency crisis, to have a statement that reads ‘We will cooperate with each another’ is all but meaningless,” said Daisuke Uno, chief strategist at Sumitomo Mitsui Banking Corp.
The leaders vowed to use government spending to reverse a spreading recession, to press for a global trade deal to ward off protectionism and to reform financial regulation and world financial institutions.
Many market players had been hoping for more specific steps to try to prevent the worst financial crisis in decades pushing the global economy into a long and deep recession.
“The G20 statement made promises of future initiatives on global financial regulation and monetary and fiscal stimulus to help global demand, but there was nothing concrete,” Barclays Capital analysts said.
Asian stock markets were mostly lower in early trade. Stocks fell 0.8 percent in Hong Kong, 2.6 percent in Sydney, 1.2 percent in Seoul and 1.1 percent in Singapore, although Tokyo managed to eke out a gain of 1.2 percent.
US president-elect Barack Obama vowed to make fighting a looming recession a top priority with new stimulus spending and help for the auto industry.
He said there was a common understanding that “we have to do whatever it takes to get this economy moving again.”
“And that we shouldn’t worry about the deficit next year or even the year after. That short term, the most important thing is that we avoid a deepening recession,” he told the CBS television network in an interview.
The yen rose as investors became more risk averse due to the lack of specifics in the G20 action plan.
The dollar fell to ¥96.25 in Tokyo morning trade, down from ¥97.06 in New York late Friday. The euro slid to US$1.2538 from US$1.2591 and to ¥120.63 from ¥122.24.
“The economic spillover of the financial crisis has increased and there is uncertainty about when conditions will stop getting worse,” said Saburo Matsumoto, chief forex strategist at Sumitomo Trust Bank.
Major companies around the world continued to feel the pain from a financial crisis that began with a wave of defaults on US subprime mortgages and developed into a full-blown credit crunch and global economic slump.
Oil prices fell in Asia after OPEC president Chakib Khelil, the energy minister of Algeria, suggested the cartel is unlikely to reduce output at a meeting later this month, and as the bad economic news continued to pile up.
New York light sweet crude for delivery next month dropped US$1.26 to US$55.78 a barrel.
DISCONTENT: The CCP finds positive content about the lives of the Chinese living in Taiwan threatening, as such video could upset people in China, an expert said Chinese spouses of Taiwanese who make videos about their lives in Taiwan have been facing online threats from people in China, a source said yesterday. Some young Chinese spouses of Taiwanese make videos about their lives in Taiwan, often speaking favorably about their living conditions in the nation compared with those in China, the source said. However, the videos have caught the attention of Chinese officials, causing the spouses to come under attack by Beijing’s cyberarmy, they said. “People have been messing with the YouTube channels of these Chinese spouses and have been harassing their family members back in China,”
The Central Weather Administration (CWA) yesterday said there are four weather systems in the western Pacific, with one likely to strengthen into a tropical storm and pose a threat to Taiwan. The nascent tropical storm would be named Usagi and would be the fourth storm in the western Pacific at the moment, along with Typhoon Yinxing and tropical storms Toraji and Manyi, the CWA said. It would be the first time that four tropical cyclones exist simultaneously in November, it added. Records from the meteorology agency showed that three tropical cyclones existed concurrently in January in 1968, 1991 and 1992.
GEOPOLITICAL CONCERNS: Foreign companies such as Nissan, Volkswagen and Konica Minolta have pulled back their operations in China this year Foreign companies pulled more money from China last quarter, a sign that some investors are still pessimistic even as Beijing rolls out stimulus measures aimed at stabilizing growth. China’s direct investment liabilities in its balance of payments dropped US$8.1 billion in the third quarter, data released by the Chinese State Administration of Foreign Exchange showed on Friday. The gauge, which measures foreign direct investment (FDI) in China, was down almost US$13 billion for the first nine months of the year. Foreign investment into China has slumped in the past three years after hitting a record in 2021, a casualty of geopolitical tensions,
‘SOMETHING SPECIAL’: Donald Trump vowed to reward his supporters, while President William Lai said he was confident the Taiwan-US partnership would continue Donald Trump was elected the 47th president of the US early yesterday morning, an extraordinary comeback for a former president who was convicted of felony charges and survived two assassination attempts. With a win in Wisconsin, Trump cleared the 270 electoral votes needed to clinch the presidency. As of press time last night, The Associated Press had Trump on 277 electoral college votes to 224 for US Vice President Kamala Harris, the Democratic Party’s nominee, with Alaska, Arizona, Maine, Michigan and Nevada yet to finalize results. He had 71,289,216 votes nationwide, or 51 percent, while Harris had 66,360,324 (47.5 percent). “We’ve been through so
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