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.
TEXT SIZE - +
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

Multimedia Anti-Keystone XL Protests Continue

Demonstrators are worried about pipeline's effect on climate change, their traditional way of life, health and safety More

Thailand's Political Power Struggle Continues

Court gave Prime Minister Yingluck Shinawatra until May 2 to prepare her defense over abuse of power charges but uncertainty remains over election timing More

Malaysia Plane Search Tests Limits of Ocean Mapping Technology

Expert tells VOA existing equipment’s maximum operating depth is around 6 kilometers as operation continues on ocean bed for any trace of MH370 More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Pet Kangaroo Helps Spread Environmental Messagei
X
Penelope Poulou
April 22, 2014 5:53 PM
Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pet Kangaroo Helps Spread Environmental Message

Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pro-Russian Separatists Plan 'Federalization Referendum' in Eastern Ukraine

Pro-Russian separatists in eastern Ukraine say they plan to move forward next month with a referendum vote for greater autonomy, despite the Geneva agreement reached with Russia, the U.S. and Ukraine to end the political conflict. VOA's Brian Padden reports from the city of Donetsk in Eastern Ukraine.
Video

Video Pope Francis Hopes Dual Canonizations Will Reconcile Church

On April 27, two popes - John the XXIII and John Paul II - will be made saints in a ceremony at St. Peter’s Square. VOA religion correspondent Jerome Socolovsky says the dual canonization is part of the current pope’s program to reconcile liberals and conservatives in the Roman Catholic Church.
Video

Video In Capturing Nature's Majesty, Film Makes Case for Its Survival

French filmmaker Luc Jacquet won worldwide acclaim for his 2005 Academy Award-winning documentary "March of the Penguins". Now Jacquet is back with a new film that takes movie-goers deep into the heart of a tropical rainforest - not only to celebrate its grandeur, but to make the case for its survival. VOA's Rosanne Skirble reports.
Video

Video Boston Marathon Bittersweet for Many Runners

Monday's running of the Boston Marathon was bittersweet for many of the 36,000 participants as they finished the run that was interrupted by a double bombing last year. Many gathered along the route paid respect to the four people killed as a result of two bombings near the finish line. VOA's Carolyn Presutti returned to Boston this year to follow two runners, forever changed because of the crimes.
Video

Video International Students Learn Film Production in World's Movie Capital

Hollywood - which is part of Los Angeles - is the movie capital of the world, and many aspiring filmmakers go there in hopes of breaking into the movie business. Mike O'Sullivan reports that regional universities are also a magnet for students who hope to become producers or directors.
Video

Video Pacific Rim Trade Deal Proves Elusive

With the U.S.-led war in Iraq ended and American military involvement in Afghanistan winding down, President Barack Obama has sought to pivot the country's foreign policy focus towards Asia. One aspect of that pivot is the negotiation of a free-trade agreement among 12 Pacific Rim nations. But as Obama leaves this week on a trip to four Asian countries he has found it very difficult to complete the trade pact. VOA's Ken Bredemeier has more from Washington.
Video

Video Autistic Adults Face Housing, Job Challenges

Many parents of children with disabilities fear for the future of their adult child. It can be difficult to find services to help adults with disabilities - physical, mental or emotional - find work or live on their own. The mother of an autistic boy set up a foundation to advocate for the estimated 1.2 million American adults with autism, a developmental disorder that causes communication difficulties and often social difficulties. VOA's Faiza Elmasry reports.
AppleAndroid

World Currencies

EUR
USD
0.7217
JPY
USD
102.17
GBP
USD
0.5949
CAD
USD
1.1009
INR
USD
60.326

Rates may not be current.