Market Report - Fed Cut Lifts Asia Hopes
Created: Dec 17 2008
Related articles: Business
CHAN:
The Federal Reserve's rate cut to a record low boosted Asian shares today.
Asian bank shares in Japan gained along with the yen against the U.S. dollar ahead of a Bank of Japan meeting this week, when most expect the central bank to act.
But Bank of Tokyo-Mitsubishi UFJ strategist Naomi Fink thinks that only minor tweaks will be adopted at the meeting.
[Naomi Fink, Bank of Tokyo-Mitsubishi UFJ]:
"Japan already had its crisis and has developed a degree of flexibility in response to its own crisis, which is helping it now. The problem is it's still not very used to spectacular growth, so it has to unlock a lot of the potential, a lot of the built up capital that it has. The important thing is that it has it, and other countries like the U.S. need it."
Despite overall Asian stock gains, regional restructuring moves continued, with digital camera giant Canon announcing the delay of a new plant and Nissan planning to cut domestic production.
Honda Motor slid ahead of an expected profit warning, which analysts attribute to falling global car sales and currency losses.
Honda CEO Takeo Fukui says his company will clamp down on spending.
[Takeo Fukui, CEO, Honda Motor]:
"There's no recovery in sight at all."
Japan's No. 2 now sees a $2 billion profit, down some 80 percent on year, and despite a fuel efficient line up, it has suffered as demand shrinks across the board and each 1-yen gain against the dollar costs it $220 million.
