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Ready, Set-Go directly to Q3
By Anne D. Picker, International Economist, Econoday
Monday, June 30, 2003
In observance of the Fourth of
July holiday in the U.S., International Perspective will be published
on Monday afternoon, July 7.
Last
Week's Highlights
There
were two major central bank meetings last week - the Bank of Japan
and the Federal Reserve. The hoopla surrounding the Fed meeting
all but drowned out any news from Japan. In any event, on Wednesday,
the Bank of Japan refrained from pumping more money into the economy
for the first time since Governor Toshihiko Fukui took charge in
March. Rising stock prices are helping to ease pressures on policymakers.
The monetary policy board left the bank's monthly purchases of government
bonds from lenders unchanged at ¥1.2 trillion ($10.2 billion)
and kept the upper limit of the reserves it makes available to lenders
at ¥30 trillion. The decision was unanimous. The Nikkei has
risen over 19 percent from a 20-year low on April 28, boosting hopes
that Japan's seven biggest banks will meet forecasts for a return
to profit this year. In May, the government agreed to a $17 billion
bailout of Resona Holdings Inc., the country's fifth largest bank,
after sliding stock prices and bad loan disposals eroded its capital.
The Fed, of
course, decided upon a 25 basis point cut to the already low Fed
funds rate. The rate now stands at 1 percent. The action itself
seemed like an anticlimax after all the histrionics beforehand.
The currency market, though, was pleased with the move. The dollar,
despite the widening yield gap between EMU and U.S. investments,
gained against the euro. The dollar rallied against the yen as well.
Investors continue to believe that the Fed is more pro-active in
stimulating growth than the ECB.
Equity markets
were jittery ahead of the Fed meeting and uninspired afterward.
Profit taking from recent sharp gains and end-of-quarter squaring
were on investor's radar once the Fed meeting was out of the way.
On the week, of the indexes followed here only the Topix was up
while the Bolsa was virtually unchanged. With one trading day left
in the second quarter, all indexes will enter the new quarter above
2002 year-end levels!
Last Week's Highlights Global Stock Market Indexes Recap of Global Markets Currencies Indicator Scoreboard
The Bottom Line Looking Ahead
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