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Japan Inc forced to tap banks; Asia stocks jump
(Agencies)
Updated: 2008-12-08 15:53 HONG KONG -- Japan's commercial paper market shrank at its fastest pace in two years in November as the global credit crunch squeezed companies' access to debt, forcing them to turn to bank lending, while Australia doled out cash to keep its consumers spending.
In Washington, White House and congressional negotiators worked on Sunday to resolve differences in an emergency rescue package for the ailing "Big Three" US automakers that would include at least $15 billion in loans. The plan gained urgency after Friday's US employment data showed more than half a million jobs were lost in November, while a report on Monday that Japanese rival Toyota Motor Corp was eyeing a sharp cut in capital spending showed how the industry downturn is engulfing all automakers. Still, Asian stocks roared higher following a Friday rally on Wall Street and hopes that agreement was near on a package for the US car industry. A spate of recent rate cuts and stimulus measures, and hopes that more are on the way, fuelled buying. The MSCI Index of Asia-Pacific stocks outside Japan jumped 6.3 percent on Monday to a three-week high, while Tokyo's main Nikkei index was up 5 percent. Market talk that Beijing would take further steps to protect growth in the world's fastest-growing economy helped shares in Hong Kong. Oil also got a boost, rising nearly 5 percent to just below $43 after hitting a 4-year low last week. "There is a lot of talk about support measures from China, including buying up more bank shares, a rescue package for the stock market and other steps to boost private consumption," said Peter Lai, director with DBS Vickers. Dariusz Kowalczyk, chief investment strategist at CFC Seymour in Hong Kong, said US stocks have become increasingly indifferent to the drumbeat of poor economic data. "However, volatility is likely to continue and we believe that stock markets in Asia and Europe have much further to fall due to a more protracted recession there than in the US," he wrote in a Monday note. Japan StrugglesJapan's outstanding balance of commercial paper dropped 9.9 percent in November from a year earlier, its biggest fall in nearly two years, Bank of Japan data showed. Failing to tap credit markets, companies turned to bank lending, which grew in November by 3.2 percent from a year earlier, its fastest pace on record, the central bank said. |
