Various Economic Data Indicate Asia Is On Its Way To Stabilize

Daily Forex Fundamentals | Written by ecPulse.com | Jun 09 09 08:02 GMT |

The economic agenda did not carry with it any important economic data from the Asian region today, however lately we were pleasantly surprised with some evident signs that the worst is behind us therefore stability is about to take control next indicating that recovery from the worst financial crisis since the great depression is close. However some data that have a mild affect on markets was released today starting with Australia in which business confidence for the month of May fell to -2 however better than the previous reading which indicated a wider fall reaching -14, meanwhile the business conditions also for the month of May also fell to -14 but this time it was worst than the previous -10. The improvement in Australia's business confidence could've been based on the government stimulus plan which reached to 22 billion Australian dollars and which was directed to building roads, railways, schools and other infrastructure projects that help to support growth and strengthened the country to be able to face the crisis that ruined exports around the world. The interest rates reductions performed by the Reserve Bank of Australia, driving it to the lowest level in 49 years at 3.0% helped to support domestic spending, direct investments to internal projects and support companies. The Central Bank held rates steady during its last meeting following some signs indicating that the country is stabilizing which were later confirmed by the GDP reading for the first quarter that proved to be positive preventing the economy from falling into recession. More data were today released from Australia as the Job Advertisements for the month of May fell by 0.2% however improving from the previous reading when it fell by 7.5%, its clear that the fiscal policy adopted by the Reserve Bank of Australia had improved the business sector and slowed down the layoffs, however unemployment remains high at 5.4% during the month of May because of the pressures faced by large companies in the past few months after exports fell sharply and domestic consumption declined. Moving to South Korea that witnessed the release if its yearly Producer Price Index for the month of May which dropped by 1.3% and for the first time since 2002 compared to the previous rise of 1.5%, obviously the decline is very much influenced by the fall in energy and row material prices that help decrease manufacturing prices but also by the decline in domestic consumption, however the Korean central bank benefited from the decline in inflation levels by lowering interest rates to 2.0% yet in its last meeting it held rates steady as a reaction to the stability signs that began to emerge from the US and the recovery signs started in China. Moving to the second largest economy in the world Japan which today released the preliminary reading for the leading index which reached in April to 76.5 from the previous revised reading of 75.5 however worst than the expected 77.2, meanwhile the preliminary reading for the coincident index reached to 85.8 in April from the previous revised reading of 84.8 yet worst than the expected 86.0, but the improvement in April from the previous month indicate that stability is finding its way into the economy, still the main focus remain on exports are they are the main supportive factor to growth in Japan. Japan holds today a meeting of the government's Council on Economic and Fiscal Policy where it is expected to announce the outline of monetary and fiscal policy in Japan, the Nikkei newspaper published today said that the government is expected for it to cut the deficit of the country by half until 2014 and start achieving surplus in the upcoming 10 years. Ecpulse disclaimer: The content of ecPulse.com and any page in the website contain information for investors/traders and is not a recommendation to buy or sell currencies, stocks, gold, silver & energies, nor an offer to buy or sell currencies, stocks, gold, silver & energies. The information provided reflects the writers' opinions that deemed reliable but is not guaranteed as to accuracy or completeness. ecPulse is not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trades currencies, stocks, gold, silver & energies should do so with caution and consult with a broker before doing so. Prior performance may not be indicative of future performance. Currencies, stocks gold, silver &energies presented should be considered speculative with a high degree of volatility and risk