World stock markets rose Tuesday as investors applauded China's pledge to stick to economic growth targets for its economy, the world's second largest. Outgoing Premier Wen Jiabao said the government would spend what it needs to meet the target of 7.5 percent enshrined in the latest five-year development plan.
Stock markets traded cautiously on Wednesday ahead of a U.S. vote on raising the nation's borrowing limit temporarily. The House is set to vote on a motion to increase the nation's $16.4 trillion borrowing ceiling for three months.
A leading lobby group for the world's financial institutions is warning investors not to get caught flat-footed in emerging markets if rich-country central banks end their easy and cheap money policy of the past few years.
Japanese shares are enduring a tsunami of their own as investors pull money out of a market that is becoming more and more unstable by the day. The Nikkei 225 Index plunged 10.6%. In Hong Kong the Hang Seng Index slid 2.9% and in China the Shanghai Composite Index fell 1.4%.
Recent reports show that several banks have begun advising their wealthiest individual clients to put as much as 10% of their assets into the precious metal. And some are stocking up by the ton.
Japanese stocks rallied Tuesday after the Bank of Japan announced it would slash its benchmark interest rate to near zero in an effort to revive its sluggish economy.
Japan's central bank has cut its key interest rate to a range of 0% to 0.1%, effectively introducing a zero-interest-rate policy. The unanimous vote came Tuesday after a two-day meeting of the Bank of Japan's nine-member policy board.
In Asia Friday Hong Kong's Hang Seng advanced 0.3% to 22,119 and Japan's Nikkei 225 fell 1% to end the day at 9,472 after yesterday's vacation. Traders in Shanghai were still on holiday.
The Japanese yen on Wednesday eased down a bit from the 15-year and nine-year highs it set against the dollar and the euro respectively on Tuesday. But the market is watching for possible intervention from Tokyo to curb the currency's rise, which threatens Japan's recovery.
With talk of outright falling prices gaining steam in the U.S., it pays to reexamine what happened in Japan during its "lost decade." Turns out that Japan had several buffers -- including less dependence on housing -- that the U.S. is now lacking.
