Investing.com- Asian equities started the week mixed as traders continue to ponder the next step in stalled U.S. budget talks.
In Asian trading Monday, Japan’s Nikkei 225 was closed, but newly elected Prime Minister Shinzo Abe stepped up pressure on the Bank of Japan to target annual inflation of 2%. The central bank’s current inflation target is 1% and Abe has threatened to repeal a Japanese law guaranteeing the bank’s independence if BoJ governors do not fall in line with Abe’s views on inflation and monetary easing.
Elsewhere, Hong Kong’s Hang Seng added 0.16% while the Shanghai Composite climbed 0.48%. Those gains follow an awful day for U.S. equities last Friday where the losses were mainly attributable to U.S. lawmakers failing to reach a fiscal cliff resolution.
Congress adjourned for the Christmas holiday last Thursday, escalating traders’ fears that U.S. policymakers will not be able to solve a possible budget crisis before the January 1, 2013 deadline.
At this point, it appears that the White House is willing to accept a small deal to avert the tax increases from going into effect on January 1, 2013. However, the caveat is that the President wants the small deal to set the stage for broader budget talks in the new year.
Congress is expected to come back into session Thursday December 27, leaving policymakers little time in which to strike any deal to avert the fiscal cliff. The deadline is January 1, 2013. Should that deadline be missed, scores of previously enacted tax cuts will become tax increases. Additionally, $600 billion in spending cuts could drain U.S. GDP by 4%-5%, sending the world’s largest economy into another recession in the process.
Most Asian bourses were steady on the first day of what is likely to be a slow week because U.S. markets will only be open for 3.5 sessions. South Korea’s Kospi added 0.16% while Singapore’s Straits Times fell 0.05%.
In a holiday-shortened session, Australia’s S&P/ASX200 added 0.25% while New Zealand’s NZSE 50 gained 0.08%. S&P 500 futures were off 0.55% at this writing.
In Asian trading Monday, Japan’s Nikkei 225 was closed, but newly elected Prime Minister Shinzo Abe stepped up pressure on the Bank of Japan to target annual inflation of 2%. The central bank’s current inflation target is 1% and Abe has threatened to repeal a Japanese law guaranteeing the bank’s independence if BoJ governors do not fall in line with Abe’s views on inflation and monetary easing.
Elsewhere, Hong Kong’s Hang Seng added 0.16% while the Shanghai Composite climbed 0.48%. Those gains follow an awful day for U.S. equities last Friday where the losses were mainly attributable to U.S. lawmakers failing to reach a fiscal cliff resolution.
Congress adjourned for the Christmas holiday last Thursday, escalating traders’ fears that U.S. policymakers will not be able to solve a possible budget crisis before the January 1, 2013 deadline.
At this point, it appears that the White House is willing to accept a small deal to avert the tax increases from going into effect on January 1, 2013. However, the caveat is that the President wants the small deal to set the stage for broader budget talks in the new year.
Congress is expected to come back into session Thursday December 27, leaving policymakers little time in which to strike any deal to avert the fiscal cliff. The deadline is January 1, 2013. Should that deadline be missed, scores of previously enacted tax cuts will become tax increases. Additionally, $600 billion in spending cuts could drain U.S. GDP by 4%-5%, sending the world’s largest economy into another recession in the process.
Most Asian bourses were steady on the first day of what is likely to be a slow week because U.S. markets will only be open for 3.5 sessions. South Korea’s Kospi added 0.16% while Singapore’s Straits Times fell 0.05%.
In a holiday-shortened session, Australia’s S&P/ASX200 added 0.25% while New Zealand’s NZSE 50 gained 0.08%. S&P 500 futures were off 0.55% at this writing.