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

Mali's Female Basketball Players Rebound After Islamist Occupation

Islamist extremists ruled northern Mali for most of 2012, imposing strict Sharia law, and now some 18 months later, the region is slowly getting back on its feet More

Video Vietnamese Staging Chinese Product Boycott After Oil Rig Spat

Many Chinese-made products go unsold, for now, with numerous Vietnamese consumers still angry over recent dispute More

Koreas Mark 61st Anniversary of War Armistice

Muted observances on both sides of heavily-armed Demilitarized Zone that separates two decades-long enemies More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Students in Business for Themselvesi
X
Mike O'Sullivan
July 26, 2014 11:04 AM
They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Students in Business for Themselves

They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Astronauts Train in Underwater Lab

In the world’s only underwater laboratory, four U.S. astronauts train for a planned visit to an asteroid. The lab - called Aquarius- is located five kilometers off Key Largo, in southern Florida. Living in close quarters and making excursions only into the surrounding ocean, they try to simulate the daily routine of a crew that will someday travel to collect samples of a rock orbiting far away from earth. VOA’s George Putic has more.
Video

Video Not Even Monks Spared From Thailand’s Junta-Backed Morality Push

With Thailand’s military government firmly in control after May’s bloodless coup, authorities are carrying out plans they say are aimed at restoring discipline, morality and patriotism to all Thais. The measures include a crackdown on illegal gambling, education reforms to promote students’ moral development, and a new 24-hour phone hotline for citizens to report misbehaving monks. Steve Sandford reports from Bangkok.
Video

Video Virtual Program Teaches Farming Skills

In a fast-changing world beset by unpredictable climate conditions, farmers cannot afford to ignore new technology. Researchers in Australia are developing an online virtual world program to share information about climate change and more sustainable farming techniques for sugar cane growers. As VOA's Zlatica Hoke reports, the idea is to create a wider support network for farmers.
Video

Video Airline Expert: Missile will Show Signature on Debris

The debris field from Malaysia Airlines Flight 17 is spread over a 21-kilometer radius in eastern Ukraine. It is expected to take investigators months to sort through the airplane pieces to learn about the missile that brought down the jetliner and who fired it. VOAs Carolyn Presutti explains how this work will be done.
Video

Video Treatment for Childhood Epilepsy Heats up Medical Marijuana Debate

In the United States, marijuana is classed as an illegal drug by the federal government. But nearly half the states have legalized it, to some degree. Proponents say some strains of marijuana might have exceptional health benefits, for treating pain or inflammation in chronic conditions such as cancer, multiple sclerosis and epilepsy. Shelley Schlender reports on a strain of medical marijuana developed in Colorado that is reputed to reduce seizures in childhood epilepsy
Video

Video Airbus Adds Metal 3D Printed Parts to New Jets

By the end of this year, European aircraft manufacturing consortium Airbus plans to deliver the first of its new, extra-wide-body passenger jets, the A350-XWB. Among other technological innovations, the new plane will also incorporate metal parts made in a 3-D printer. VOA's George Putic has more.
Video

Video AIDS Conference Welcomes Exciting Developments in HIV Treatment, Prevention

Significant strides have been made in recent years toward the treatment and prevention of HIV, the virus that causes AIDS. This year, at the International AIDS Conference, the AIDS community welcomed progress on a new pill that may prevent transmission of the deadly virus. VOA’s Anita Powell reports from Melbourne, Australia.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.

AppleAndroid

World Currencies

EUR
USD
0.7305
JPY
USD
101.53
GBP
USD
0.5830
CAD
USD
1.0656
INR
USD
60.075

Rates may not be current.