In Japan today, the Nikkei index slid 1.4 percent, finishing the day at 10,238. The decline was led by shares in the country's major car exporting companies, precipitated by fears that the U.S. government's announcement of the end of the "cash for clunkers" program on August 24th will stymie future orders.

Nissan was the biggest loser, dropping 5.2 percent, trailed by Honda, which sank 4.1 percent. Honda attributes nearly half of its sales to the U.S. market. Toyota Motor Corp., which shed 2.9 percent, may have the most to lose as the company with the largest share of the clunker-driven sales since the program began; two of its models are on the current list of America's five best-selling cars.

Enthusiastic car dealers across the U.S. claim the program has done what it was intended to do, bringing more traffic into their showrooms and boosting consumer interest, which they hope will last beyond the end of the clunkers program.

But others around the blogosphere complain that the program is ultimately doomed to failure, having simply time-shifted the purchase of new cars and created short-term demand to stimulate the economy rather than boosting sales in the longer term.

Japanese car manufacturers will have to wait and see if their U.S. sales remain buoyant once customers lose the incentive of getting up to $4,500 back for trading in their old, less fuel-efficient vehicles.

Elsewhere in Asia, China's Shanghai Composite Index, which has become the trendsetter for equity markets both in the East and the West, rose 1.7 percent today, ending the day at 2961.

Analysts predict that the Asian dragon is reviving from its recent economic slowdown, with the outlook for China's corporate earnings looking increasingly solid. Still, regulators are planning to tighten capital requirements for banks. The China Banking Regulatory Commission sent draft rule changes this past Wednesday and is now awaiting feedback from the banks.

Across the South China Sea, Hong Kong's Hang Seng index slipped 0.6 percent to close at 20,199. Ripples from the news of China's proposed banking regulation changes hurt Bank of China Ltd., Hong Kong's third-largest lender, sending shares tumbling as much as 2.4 percent during the day and finally settling at HK$3.8 ($0.49). The region's second largest bank, China Construction Bank Corp. suffered smaller losses as its stock fell 0.7 percent.

Now we just need the economic luminaries enjoying themselves in Jackson Hole to think up a scheme to keep those Toyota Priuses driving off the lots.


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