By Anne D. Picker, International Economist,Econoday
Monday, March 4, 2002

Investors put a positive spin on things last week and as a result most indexes followed here rose. Favorable economic news and no downside surprises on the corporate scene boosted investors' morale. Only the Australia all ordinaries (which slipped less than 5 points) and the Hong Kong Hang Seng (which tumbled 240 points) declined on the week. Investors were urged on by promising U.S. and European economic data that showed the manufacturing recession could be coming to an end. But one month - or one quarter - does not make a trend as the old saying goes.

The Bank of Japan eased monetary policy at its meeting Thursday. The BOJ increased liquidity by raising its monthly purchases of Japanese Government Bonds (JGBs) from Y800 billion a month to a total of Y1 trillion a month. The Bank also said that it would provide as much liquidity as the system required to prevent any disruption to the financial system ahead of March 31, the end of the Japanese fiscal year. The Bank will disregard its formal target of keeping current account deposits between Y10 and Y15 trillion. Prime Minister Koizumi's plan to rid Japan of deflation, after all the hype, disappointed markets.

Most of the major industrial countries have released their fourth quarter 2001 gross domestic product data, except Japan that is expected to post a one percent GDP decline on Friday. The graph below compares year-over-year GDP growth for the United States, Germany, France, Britain, Japan and Canada. With the exception of Britain, all have suffered at least one quarterly decline (measured quarter/quarter). German growth was negative in both the third and fourth quarters, technically putting Germany in recession (see indicator scoreboard). But some German data show a bottoming out or turn in the first quarter, though things will remain tenuous at best at least until growth becomes more imbedded. As usual, the United States is expected to lead Europe out of the decline with Japan trailing badly.

Last Week's Highlights   •   Global Stock Market Indexes   •   Recap of Global Markets   •   Currencies   •  Indicator Scoreboard

The Bottom Line   •   Looking Ahead