Skip to comments.Asian shares tumble, yen soars on emerging market anxiety
Posted on 01/26/2014 8:18:47 PM PST by Ernest_at_the_Beach
TOKYO (Reuters) - Asian shares took a beating and the yen raced to a seven-week high against the dollar on Monday, as emerging markets remained under pressure with the U.S. Federal Reserve poised to continue tapering its stimulus and tighter credit conditions in China raising fears of a slowdown.
MSCI's broadest index of Asia-Pacific shares outside Japan tumbled 1.6 percent to nearly a five-month low, on track for its worst one-day performance since August after losing more than 1.0 percent on Friday. Japan's Nikkei share average (NIK:^9452) gave up the 15,000-level and dropped 2.7 percent.
Expectations of continued stimulus withdrawal by the U.S. Federal Reserve added to the market's gloom.
Fed officials are seen cutting bond-buying by another $10 billion at their regular two-day policy meeting beginning on Tuesday, and are likely to remain unfazed by the ongoing rout in emerging markets.
"Everyone was reminded about last May's turmoil when investors unwound their positions in emerging markets on worries about Fed's tapering," said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo.
The Korea Composite Stock Price Index (KOSPI) .KS11 was down 1.7 percent after touching its lowest level since August 29.
Investors continued to fret about the impact of tightening credit conditions in China as Beijing seeks to curb growth in high-risk lending.
The dollar slipped as low as 101.77 yen early on Monday, its weakest level since December 6, and was last trading at 102.22 yen, down about 0.2 percent. The yen's session high marked a strengthening of more than 2 yen over the past three sessions, as Japanese stocks withered in line with their global counterparts.
The euro also fell to a seven-week low of 139.25 yen but recouped some losses to buy 139.85 yen.
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I hear Obama has been learning to play the fiddle.
I’m no expert but...
If tapering was truly in the cards, the dollar would not be sinking vs the yen, seems to me. The prospect of rising rates would be supportive of the US dollar. In general at least.
In addition, Janet Yellen will soon be at the helm. You can be sure she will put the monetary pedal to the metal more than Ben did. And the fx markets know it.
Bubble, bubble, toil and trouble. The day of reckoning is here.
The big issue here is that Argentina, Turkey and Thailand are all experiencing political turmoil, and equities markets don't like political turmoil, especially in these three countries.
“The Peoples Bank of China , the central bank, has just ordered commercial banks to halt cash transfers.”
For three days if domestic currency, and nine days for conversions to foreign currency.
Hmmm... routine system maintenance eh? Right into the Lunar New Year holiday?
It seems there’s a problem over in China with their domestic banking system, whcih leads me to wonder if it’s time to say “Here it comes....”
HSBC to ‘protect’ customers by not letting them withdraw their money
If you bank at HSBC in England, dont plan on making any large cash withdrawals. At least not without a good explanation. Or, maybe even a permission slip.
Thats because a previously unannounced change in banking policy is blocking customers from making large withdrawals without evidence explaining why they need the money from their accounts.
I was just pondering how Janet Yellen will have been chair of the FED 24 hours before they allow the transfers to resume. I’m Feeling there is going to be a hug shift occuring on the first of February. Look out for major “selling out” to begin.
the credit wall behind the yen is collapsing.
0failure’s admin moved to help prop it up using jpmorgan gold.
china stops withdrawals to try and slow the collapse and sure up its currency.
bitcoins will be utilized to move wealth away from the epicenter of the meltdown.
people will need to move out of bitcoins in order to utilize in the real world.
the dollar will be ‘stronger’ in comparison, as it’s not sinking as fast.
expect bitcoin to dollar (or euro) transactions to increase.
this is how i see it. i could be wrong, but i don’t think so.
note the volume on the 26th...
They created that bubble by funding the carry trade and they understand perfectly well that it is a bubble. I think they would rather create and pop a series of smaller bubbles than let a big one go too far.
I don't know much about those, but I do know that the players always use everything at their disposal and those bitcoiins, no matter how proletariat they may appear, will be at their disposal.
If you are a Fat Cat, then you know that you need to get the little guys screaming about a collapse so that they feel relieved when the Fed sends more Billions into the Fat Cats’ pockets for “bailouts.” Whew!
Can’t have the Fed tapering too much, might cut off the gravy train for the .01% government handouts to the hyper-wealthy.
Collectivism in America only benefits the rich and the poor.
The truth of the matter is a large majority of the people in this country have no idea the “markets” are even there. And many, like me, know they’re there but don’t understand them very well.
My theory is simple. If everyone makes money selling “stuff” to each other the prices will always go up. Eventually it all has to crash and start all over. I always think about Justin Wilson’s story about two friends who kept selling their mule back and forth to each other.
Well Japan has been in an Obama “recovery” for 15 or so years now.
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HSBC reversed that policy or so they said.
I’d like to see some researcher, maybe at Heritage, deconstruct all the moves FDR made to bail out the economy. I often wonder how much of that effort and money went directly to his political cronies.