September 17, 2009
Economic Outlook: Up is up
Asian markets swung higher Thursday, some with strong finishes, following a streak of nine out of 10 positive trading sessions on Wall Street.
Although unemployment looms as a global concern, it helps exporting nations when their biggest customer finds solid ground on which to stand. That said, gains in the United States are everybody's gain.
As strong an authority as there might be on the subject, Federal Reserve Chairman Ben Bernanke said this week the U.S. recession
is very likely over at this point.
That's the kind of statement that can carry markets around the globe.
In Asia, the Bank of Japan announced it would keep interest rates unchanged at 0.1 percent, maintaining a cautious approach to the recovery, consistent with the U.S. Federal Reserve, the Bank of England and the Central Bank of Europe, which have elected to maintain low interest rates in recent meetings.
Like the first wisps of wood smoke in the fall or the first flowers of spring, the Bank of Japan said,
Japan's economic conditions are showing signs of recovery.
BOJ Gov. Masaaki Shirakawa said corporate financing had improved and the stronger yen, in the short term, would lower prices.
It is possible for a stronger yen to support the economy in the long run, he said.
It is tricky times for central bankers. As recovery begins to unfold, the average wage earner is likely to begin clamoring about all those tax dollars tossed at banks to avert panic. But, economists often point to Japan's reaction to the 1990s downturn as one in which support measures were pulled back too soon. The so-called
lost decade ensued, a prolonged downturn exasperated by taking money off the table too soon.
In Japan, the yen has gained 6.7 percent against the dollar since June, the British Broadcasting Corp. reported Thursday. That gives the export-oriented economy that much less of an edge in foreign markets.
On Thursday, the Nikkei 225 in Tokyo posted a 1.68 percent gain. The Hang Seng index in Hong Kong bounced up 1.71 percent. In Australia, the S&P/ASX index gained 1.39 percent, while the Singapore Straits Times fell back, off 0.07 percent.
India's Sensex index rose 0.2 percent. Taiwan's TAIEX rose 0.5 percent. In China, the Shanghai composite index rose 2.02 percent.
In midday trading in Europe, markets were up. The FTSE 100 in Britain rose 0.37 percent. The DAX 30 in Germany gained 0.52 percent, while the CAC 40 in France rose 0.48 percent. The broader DJStoxx 600 was up 0.49 percent.