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.
‘TOO TIRED’: The former mayor’s political party said that he had been questioned for nearly 19 hours, so he declined to be questioned at night, as he felt exhausted Taiwan People’s Party (TPP) Chairman Ko Wen-je (柯文哲) was arrested early yesterday morning after being questioned by prosecutors over his alleged role in a corruption scandal concerning the Core Pacific City redevelopment project during his tenure as Taipei mayor. The arrest was made after Ko refused to be questioned at night and attempted to leave the prosecutors’ office, the Taipei District Prosecutors’ Office said. Prosecutors were worried that he would collude with others involved in the case to make false statements if they allowed him to leave, so they issued an order to arrest him, the office said. Ko yesterday sought a court
ECONOMIC RESILIENCE: Only 11.4 percent of Taiwan’s overseas investments last year were in China, and businesses are dispersing their investments elsewhere, Lai said China’s ambition to annex Taiwan is based on a desire to change the rules-based international order, rather than a desire for territorial gains, President William Lai (賴清德) said in an interview. During an appearance on the talk show The View With Catherine Chang, aired last night, Lai said China aimed to achieve hegemony, and that peace and stability in the Taiwan Strait was an issue of worldwide concern. During the interview, Lai also discussed his “four-pillar plan” for peace and prosperity, which he first outlined in an article published by the Wall Street Journal on July 4 last year. That
Thirty Taiwanese firms, led by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and ASE Technology Holding Co (日月光投控), yesterday launched a silicon photonics industry alliance, aiming to accelerate the medium’s development and address the energy efficiency of artificial intelligence (AI) devices like data centers. As the world is ushering in a new AI era with tremendous demand for computing power and algorithms, energy consumption is emerging as a critical issue, TSMC vice president of integrated interconnect and packaging business C.K. Hsu (徐國晉) told a media briefing in Taipei. To solve this issue, it is essential to introduce silicon photonics and copackaged optics (CPO)
GRAFT PROBE: Critics questioned Ko claiming he did not know about the Core Pacific floor area ratio issue until this year, citing a 2021 video in which he was asked about it Taiwan People’s Party (TPP) Chairman Ko Wen-je (柯文哲) was released without bail early yesterday, while his deputy during his tenure as Taipei mayor was detained and held incommunicado after being questioned since Friday over graft allegations related to a shopping center redevelopment project. Prosecutors on Saturday filed a request with the Taipei District Court to officially detain Ko and former Taipei deputy mayor Pong Cheng-sheng (彭振聲) over allegations surrounding the redevelopment of Core Pacific City, also known as Living Mall (京華城購物中心). The court yesterday determined that the evidence provided by prosecutors was insufficient to justify the detention of Ko and ordered his