News / Asia

Asia Stocks Tumble

A man is reflected on an electric board showing the Nikkei 225 index in Tokyo, Japan, August 3, 2011
A man is reflected on an electric board showing the Nikkei 225 index in Tokyo, Japan, August 3, 2011

Investors in Asia turned pessimistic, Wednesday, reversing gains earlier in the week after U.S. lawmakers reached a debt deal that averted an unprecedented American default.

Share prices fell sharply in the region in the latest trading session, with analysts saying Asian stock exchanges were reacting to renewed worry about the direction of the world’s largest economy.

Major stock markets in Asia dropped, on average, more than two percent. Meanwhile, gold surged to a record high, while the dollar stayed weak, especially against the Japanese yen.

Fresh concern followed Wall Street’s Tuesday declines because of weak U.S. economic reports and poor earnings from several major American corporations.

In South Korea, the benchmark KOSPI closed at 2066 points, a drop of 2.6 percent. In Japan, the Nikkei index finished 207 points lower, some 2.1 percent.

Hong Kong’s Hang Seng index fell more than 428 points, a loss of 1.9 percent. And, in India, the benchmark Sensex hit a six-week low in intra-day trading.

Sean Hwang, who heads equity research at Mirae Asset Securities in Seoul sees a temporary flight to safety among Asian investors continuing for a week or two.

"The sky-rocketing U.S. ten-year Treasuries and gold price shows the risk appetites of investors are really low. For the time being the investors' preference to these kind of safe assets will remain. But the price imbalance between the risky assets and the safe assets are heavily distorted," he said. "So we expect the risky assets' price to recover, sooner or later."

Hwang says investors will realize there is still value in purchasing stocks in some of the emerging markets.

"Compared to the other asset classes, the stock markets, such as [South] Korea and China, appear to be significantly undervalued,” said Hwang.

In Japan there are indications of readiness to intervene in currency markets, with the dollar around 77 yen, nearing a record low in the modern era.

Japanese Finance Minister Yoshihiko Noda is vowing to make “an all-out effort” to prevent a further surge for his country’s currency.

Prime Minister Naoto Kan is also calling the strong yen a source of concern and says Japan has to closely watch foreign exchange markets.

The strong yen threatens to eliminate any economic rebound for Japan, following its devastating March 11th earthquake and tsunami. That fear is being echoed by Bank of Japan Governor Masaaki Shirakawa, who says the yen’s current level could negatively effect the country’s economy, the world’s third largest.

Meanwhile, a little-known Chinese debt rating agency has downgraded the U.S. credit rating.

Dagong Global Credit Rating lowered its rating for U.S. debt from A-plus to A. It says the deal reached in Washington this week will not solve the underlying U.S. debt problems nor improve the country's ability to pay.

The Chinese downgrade is not expected to have much effect on interest rates because the two major rating agencies in the United States have announced they will not immediately be altering America’s top rating.

Chinese Central Bank Governor Zhou Xiachuan is calling on Washington to impose “responsible measures” to manage its debt. In a statement, Zhou warned that volatility in the U.S. bond market could affect the international monetary system’s stability, jeopardizing a global economic recovery.

China is the largest holder of U.S. debt and the world’s second largest economy.

You May Like

Pakistan Among Developing Countries Hit Hard by Global Warming

Pakistani officials hope developed nations agree to scale back emissions, offer help in dealing with climate change

Video Speed, Social Media Shape Counterterrorism Probes

Speed is critical in effort to prevent subsequent attacks; demographics of extremists lend themselves to communicating, establishing profiles on digital platforms

Islamic State Oil Trade Seduces Friends, Foes Alike

Terrorist group rakes in up to $500 million a year in sales to customers such as Syrian government, US-supported rebels and Turkey

This forum has been closed.
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Social Media Aids Counter-Terrorism Investigationsi
Katherine Gypson
December 01, 2015 10:06 PM
In the aftermath of the Paris attacks, officials carried out waves of raids and arrests to break up terror cells. As VOA's Katherine Gypson reports, social media can be a key tool for investigators.

Video Social Media Aids Counter-Terrorism Investigations

In the aftermath of the Paris attacks, officials carried out waves of raids and arrests to break up terror cells. As VOA's Katherine Gypson reports, social media can be a key tool for investigators.

Video Russia Marks World AIDS Day With Grim News

While HIV infection rates have steadied or even declined in many European countries, the caseload has grown rapidly in Russia, as VOA's Daniel Schearf reports from Moscow. Over half of the new infections were transmitted through injection drug use.

Video Pakistan Hit Hard by Global Warming

As world leaders meet in Paris to craft a new global agreement aimed at cutting climate-changing greenhouse-gas emissions, many developing countries are watching closely for the final results. While most developing nations contribute much less to global warming than developed countries, they often feel the effects to a disproportionate degree. As Saud Zafar reports from Karachi, one such nation is Pakistan. Aisha Khalid narrates his report.

Video With HIV, Can We Get to Zero?

The theme of this year's World AIDS Day is "Getting to Zero." The U.N. says new HIV infections have been reduced by 35 percent since 2000 and AIDS-related deaths are down by 42 percent since the peak in 2004. VOA's Carol Pearson takes a look at what it might take to actually have an AIDS-free generation.

Video Political Motives Seen Behind Cancelled Cambodian Water Festival

For the fourth time in the five years since more than 350 people were killed in a stampede at Cambodia’s annual water festival, authorities canceled the event this year. Officials blamed environmental reasons as the cause, but many see it as fallout from rising political tensions with a fresh wave of ruling party intimidation against the opposition. David Boyle and Kimlong Meng report from Phnom Penh.

Video African Circus Gives At-Risk Youth a 2nd Chance

Ethiopia hosted the first African Circus Arts Festival this past weekend with performers from seven different African countries. Most of the performers are youngsters coming form challenging backgrounds who say the circus gave them a second chance.

Video US Lawmakers Brace for End-of-Year Battles

U.S. lawmakers are returning to Washington for Congress’ final working weeks of the year. And, as VOA's Michael Bowman reports, a full slate of legislative business awaits them, from keeping the federal government open to resolving a battle with the White House over the admittance of Syrian refugees.

Video Taiwan Looks for Role in South China Sea Dispute

The Taiwanese government is one of several that claims territory in the hotly contested South China Sea, but Taipei has long been sidelined in the dispute, overshadowed by China. Now, as the Philippines challenges Beijing’s claims in an international court at The Hague, Taipei is looking to publicly assert its claims. VOA’s Bill Ide has more from Beijing.

Video After Terrorist Attacks, Support for Refugees Fades

The terrorists who killed and injured almost 500 people around Paris this month are mostly French or Belgian nationals. But at least two apparently took advantage of Europe’s migrant crisis to sneak into the region. The discovery has hardened views about legitimate refugees, including those fleeing the same extremist violence that hit the French capital. Lisa Bryant has this report for VOA from the Paris suburb of Cergy-Pontoise

Video Syrian Refugees in US Express Concern for Those Left Behind

Syrian immigrants in the United States are concerned about the negative tide of public opinion and the politicians who want to block a U.S. plan to accept 10,000 Syrian refugees. Zlatica Hoke reports many Americans are fighting to dispel suspicions linking refugees to terrorists.

Video Thais Send Security Concerns Down the River

As Thailand takes in the annual Loy Krathong festival, many ponder the country’s future and security. Steve Sandford reports from Chiang Mai.

Video Islamic State Unfazed by Losses in Iraq, Syria

Progress in the U.S.-led effort to beat Islamic State on its home turf in Iraq and Syria has led some to speculate the terror group may be growing desperate. But counterterror officials say that is not the case, and warn the recent spate of terror attacks is merely part of the group’s evolution. VOA National Security correspondent Jeff Seldin has more.

VOA Blogs