A calm week in the Asian pacific
International Trading
THE TECHNIQUE OF GIVING A GOOD MASSAGE
14 years ago
Saturday, August 21, 2010
, Posted by Usman Ali Minhas at 10:44 AM
The Asian pacific witnessed a quiet week excluding the Japanese economy which released downbeat GDP figures and the Australia released the RBA minutes. Asian stock markets marginally advanced this week, despite the Yen edging towards a 15-year high against the dollar, which has a negative effect on companies' share prices.
The Japanese expanded at the slowest pace in three-quarters as global demand retreated, which eroded the nations' exports, signaling that the recovery in the economy is losing steam.
Japan's preliminary annualized gross domestic product expanded 0.4% in the second quarter, after growing 4.4% during the previous quarter, missing analysts' estimates for 2.3%. The economy expanded by 0.1% in the second three months ending June 30, compared with the previous 1.2% which was revised to 1.1%, while forecasts referred to 0.6%.
Japan’s annualized GDP deflator preliminary reading inclined to -1.8% during the second quarter, compared with the previous -2.8% a year earlier.
Furthermore, moderating growth in the nation, is pressuring the BOJ to ease its monetary policy further to spur expansion and stave off deflation.
The Bank of Japan decided to keep interest rates near zero at 0.10% during the month of August to support the economy's recovery as the bank gauges the risk of the Yen's advance.
However, the Bank increased its credit program to 20 trillion yen ($232 billion) during March, and in June unveiled a 3 trillion yen plan, which encouraged short-term loans. The BOJ is unlikely to ease its policy any time soon, it will “naturally consider what it can do” if the global economy stagnates and the yen’s gains accelerate.
As for Australia, the Reserve Bank of Australia released the minutes concerning their August meeting, where Australian policy decided to keep borrowing costs unchanged two-weeks ago for the third consecutive month, judging the nation's economic expansion is not stoking inflation amid doubts about the global recovery.
Also Australian policy makers indicated that there are signs of a greater degree of caution in household spending which may reduce inflationary pressures caused by the nation's mining boom.
From another side, investors don’t expect Governor Mr. Stevens to increase interest rate until next year, after he increased the benchmark rate in May to 4.50%, where the markets somewhat to stabilize, but there was still more uncertainty over the global outlook than a year earlier.
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