News / Economy

Asian Financial Markets, Currencies Rally After Fed Continues Stimulus

People are reflected in an electronic board outside a Tokyo brokerage,  Sept. 19, 2013.
People are reflected in an electronic board outside a Tokyo brokerage, Sept. 19, 2013.
Ron Corben
Asia's financial markets rallied in buoyant trading Thursday after U.S. Federal Reserve Chairman Ben Bernanke surprised investors by announcing the Fed would continue a multibillion dollar financial stimulus program aimed at the continuing uneven performance of the U.S. economy.  
 
The rally Thursday on Asia's financial  markets sent share prices higher and was marked by a surge in currencies that sent the U.S. dollar down.  Many investors had expected the U.S. Federal Reserve would follow through with plans announced earlier this year to start tapering off the $85 billion a month stimulus program.
 
Share prices across the region were higher with Japan's Nikkei Index setting a trend by gaining 1.8 per cent, as gains were also registered in Indonesia, India and Australia.
 
The U.S. dollar traded towards a seven month low against a basket of currencies as emerging Asian currencies surged in value.
 
Hong Kong-based  Mitul Kotecha, head of global foreign exchange strategy for Credit Agricole, said markets were clearly caught off guard.
 
"So I think it was a positive surprise from the market perspective. Not sure it did the Fed's credibility a lot of good given that they basically - well the markets had been led to believe that one would see a tapering beginning. I still think it’s only a delay rather than a change in stance. But the bottom line is it gives the market a lot of breathing space," said Kotecha.
 
Emerging economies such as India had benefited as funds flowed into regions offering higher returns, especially in areas such as property. But a slowing in India's growth has also led to a sharply weaker Indian rupee in recent months.
 
National institute of Public Finance Policy professor. N.R. Bhanunurthy, says while the U.S. moves have offered "temporary relief" to emerging markets, the outlook remains volatile amid uncertainty over future Federal Reserve policy.
 
"There seems to be temporary relief in my sense, this will help the Indian financial managers to get ready for any future shocks coming from the Federal Reserve. At the moment it's very difficult for countries like India to protect themselves in this kind of volatile policy environment. My guess is that this may be the right time for central banks to intervene in the markets, particularly the foreign exchange market," said  Bhanunurthy.    
 
Shanghai, Taipei and South Korean markets are closed until the end of the week for holidays and so were unable to react to the Fed’s decision.
 
Market analysts say they expect the U.S. Federal Reserve to maintain the current policy over the remaining months of the year with a possible change not expected until December or early 2014.

You May Like

Video Experts Warn World Losing Ebola Fight

Doctors Without Borders says world is losing battle against Ebola, unless wealthy nations dispatch specialized biological disaster response teams More

Video Experts: Rise of Islamic State Significant Development in Jihadism

Many analysts contend the group - which grew out of al-Qaida in Iraq - has been rebuilding for years More

US-Based Hong Kongers Pledge Support for Pro-Democracy Activists

Democracy advocates call on Chinese living abroad to join them in opposing new election rules for their home territory More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Larger Than Life Chinese Lanterns Make Southern California Appearancei
X
Elizabeth Lee
September 02, 2014 8:57 PM
Chinese lanterns with a long history are lighting up in 21st century style at the Los Angeles County Fair in southern California. Visitors can see traditional lanterns that hang, but also lanterns in the shape of animals, iconic landmarks and many other objects, all created by artisans from a place in China known for its lanterns. Elizabeth Lee has the details from the fair in the city of Pomona.
Video

Video Larger Than Life Chinese Lanterns Make Southern California Appearance

Chinese lanterns with a long history are lighting up in 21st century style at the Los Angeles County Fair in southern California. Visitors can see traditional lanterns that hang, but also lanterns in the shape of animals, iconic landmarks and many other objects, all created by artisans from a place in China known for its lanterns. Elizabeth Lee has the details from the fair in the city of Pomona.
Video

Video Experts See Rise of ISIS as Significant Development

The Islamic State’s rise seems sudden. It caught the U.S. by surprise this summer when it captured large portions of northern Iraq and spread its wings in neighboring Syria. But many analysts contend that the group - which grew out of al-Qaida in Iraq - has been rebuilding for years. VOA's Jela de Franceschi takes a closer look at the rise of ISIS and its implications for the Middle East and beyond.
Video

Video Israel Concerned Over Syrian Rebels in Golan

Israeli officials are following with concern the recent fighting between Syrian rebels and government forces near the contested Golan Heights. Forty-four U.N. peacekeepers from Fiji have been seized by Syrian Islamist rebels and the clashes occasionally have spilled into Israel. VOA’s Scott Bobb reports from Jerusalem.
Video

Video Ukraine Schools Resume Classes, Donate to Government Forces

A new school year has started in Ukraine but thousands of children in the war-torn east are unable to attend because of ongoing clashes with pro-Russia rebels. In Ukraine's capital, patriotic education has become the norm along with donations to support injured security forces fighting to take back rebel-held areas. VOA's Daniel Schearf reports from Kyiv.
Video

Video US Detainees Want Negotiators for Freedom in North Korea

The three U.S. detainees held in North Korea were permitted to speak with foreign media Monday. The government of Kim Jong Un restricted the topics of the questions, and the interviews in Pyongyang were limited to five minutes. Each of the men asked Washington to send a representative to Pyongyang to secure his release. VOA’s Carolyn Presutti has our story.
Video

Video Turkmen From Amerli Describe Survival of IS Siege

Over the past few weeks, hundreds of Shi'ite Turkmen have fled the town of Amerli seeking refuge in the northern city of Kirkuk. Despite recent military gains after U.S. airstrikes that were coordinated with Iraqi and Kurdish forces, the situation remains dire for Amerli’s residents. Sebastian Meyer went to Kirkuk for VOA to speak to those who managed to escape.
Video

Video West Africa Ebola Vaccine Trials Possible by Early 2015

A U.S. health agency is speeding up clinical trials of a possible vaccine against the deadly Ebola virus that so far has killed more than 1,500 people in West Africa. If successful, the next step would be a larger trial in countries where the outbreak is occurring. VOA's Carol Pearson has more.
Video

Video Survivors Commemorate 70th Anniversary of Nazi Liquidation of Jewish Ghetto

When the German Nazi army occupied the Polish city of Lodz in 1939, it marked the beginning of a long nightmare for the Jewish community that once made up one third of the population. Roughly 200,000 people were forced into the Lodz Ghetto. Less than 7,000 survived. As VOA’s Kane Farabaugh reports, some survivors gathered at the Union League Club in Chicago on the 70th anniversary of the liquidation of the Lodz Ghetto to remember those who suffered at the hands of the Nazi regime.

AppleAndroid

World Currencies

EUR
USD
0.7537
JPY
USD
103.79
GBP
USD
0.6032
CAD
USD
1.0957
INR
USD
60.522

Rates may not be current.