Asian stock prices fell this morning as the anemic growth of the Japanese economy and problems in the global credit market indicate that the world economy is slowly recovering from recession.
On the Tokyo Stock Exchange, the Nikkei index fell by 1.3 percent this morning, while stock prices in Shanghai and Hong Kong weakened by more than 1 percent. Stock indices in Australia, Singapore, Indonesia, and India also fell slightly, while only the South Korean Kospi index rose this morning. As a result, around 7 AM, the MSCI index of Asia-Pacific stocks, excluding Japan, was down 0.6 percent. Yesterday, stock prices on European exchanges and Wall Street also fell due to Dubai’s debt crisis, which remains unresolved two weeks after the emirate requested a deferral of its financial obligations. The decision by the rating agency Fitch to downgrade Greece’s credit rating due to the country’s high debt also points to problems in the global credit market.
This has raised investor fears of new credit losses, and this morning, data on weaker-than-expected growth of the Japanese economy negatively impacted Asian markets. Japan’s gross domestic product grew by 1.3 percent year-on-year in the third quarter, according to revised data, while analysts had expected growth of 4.8 percent. “The figures on Japanese GDP are significantly below expectations, creating the impression that short-term prospects for the economy are not very good,” says Noritsugu Hirakawa, a strategist at Okasan Securities in Tokyo. Meanwhile, currency markets were calm this morning after the dollar index, which shows the value of the US dollar against six major world currencies, rose by 0.6 percent yesterday. The dollar’s exchange rate against the Japanese currency is around 88.35 yen. However, the European currency weakened against the US dollar, with the euro price falling from yesterday’s 1.4838 to 1.4725 dollars. (H)
