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.
US President Donald Trump yesterday announced sweeping "reciprocal tariffs" on US trading partners, including a 32 percent tax on goods from Taiwan that is set to take effect on Wednesday. At a Rose Garden event, Trump declared a 10 percent baseline tax on imports from all countries, with the White House saying it would take effect on Saturday. Countries with larger trade surpluses with the US would face higher duties beginning on Wednesday, including Taiwan (32 percent), China (34 percent), Japan (24 percent), South Korea (25 percent), Vietnam (46 percent) and Thailand (36 percent). Canada and Mexico, the two largest US trading
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
China's military today said it began joint army, navy and rocket force exercises around Taiwan to "serve as a stern warning and powerful deterrent against Taiwanese independence," calling President William Lai (賴清德) a "parasite." The exercises come after Lai called Beijing a "foreign hostile force" last month. More than 10 Chinese military ships approached close to Taiwan's 24 nautical mile (44.4km) contiguous zone this morning and Taiwan sent its own warships to respond, two senior Taiwanese officials said. Taiwan has not yet detected any live fire by the Chinese military so far, one of the officials said. The drills took place after US Secretary
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