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2015年8月27日 (木)

世界同時株安 市場不安の沈静化を急ぎたい

The Yomiuri Shimbun
Prompt efforts should be made to soothe concerns of markets
世界同時株安 市場不安の沈静化を急ぎたい

With China’s economy the focus of concern, turmoil continues to roil global markets.

The Nikkei Stock Average plunged 733 points from Monday’s close to end at 17,806 on the Tokyo Stock Exchange on Tuesday. This was the sixth straight trading day the market has declined, with the plunge totaling more than 2,800 points.

The accelerated appreciation of the yen on the foreign currency market also helped send stocks plummeting.

The plunge in stock prices, which started on the Chinese market, has had a knock-on effect on other major markets — the United States, European and Asian countries — taking on an aspect of stock prices simultaneously falling the world over.

We should not let our guard down, but a feature of the wild fluctuations of stock prices seems to be due to speculative moves.

Economic revitalization minister Akira Amari said it is necessary to deal with the issue calmly. In fact, the economies of Japan, the United States and European countries are still on a firm footing. We should not become too pessimistic about the current situation.

It is vital to assuage the uneasiness in the market and prevent it from adversely affecting the real economy.

Japan, the United States, European countries and China have to strengthen policy coordination to calm the market.

The stock plunge was triggered by China’s devaluation of its currency, the yuan, on Aug. 11. This led to the view that China’s economy had deteriorated to such a degree that measures were needed to prop up its exports, leading to prices on the Shanghai Stock Exchange to nosedive.

China is maintaining its economic growth at 7 percent. But many of the country’s key economic indicators, such as consumption and exports, have shown signs of an economic slowdown. There is a deep-seated belief that the real state of the economy is even more serious.

China slowdown worse?

By pursuing a “new normal” policy, which allows the country’s economic growth to slow down, can the Chinese government lead its economy to a soft landing through structural reforms? A sense of distrust in the Chinese government’s economic management has exacerbated market uneasiness.

The administration under Chinese President Xi Jinping needs to face up squarely to the reality that China has become the cause of the global market turmoil.

Although China decided to further ease monetary policy on Tuesday, it needs to do much more to stabilize its economy.

Another major point of issue is whether the United States will raise interest rates in the near future. It has been pointed out that if the United States forcibly raises interest rates while markets are still in tumult, funds would immediately flow out of emerging markets, possibly resulting in currency and financial crises.

The United States has to end its monetary relaxation policy eventually, but it should not send the world economy into disorder by hastily exiting from that policy. The Federal Reserve Board should keep a close eye on market trends and look for the proper time to increase rates.

Following the stock price decline, there are calls, including those within the Liberal Democratic Party, for a supplementary budget to initiate economic stimulus measures.

But as the performance of Japanese companies is at a record high level, the government should refrain from taking fiscal action too quickly.

It is most important to steadily implement Abenomics, the economic policy pursued by the administration under Prime Minister Shinzo Abe, and realize a full-fledged economic growth led by private-sector demand. The government should promote a comprehensive growth strategy to induce vitality into the private sector by easing regulations to encourage the fostering of new businesses.

(From The Yomiuri Shimbun, Aug. 26, 2015)


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