Asia Economy

Asia's battered stock markets suffered renewed heavy selling early today after Russian President Boris N. Yeltsin sacked his government--creating more uncertainty for already jittery world financial markets. In Tokyo, the benchmark Nikkei-225 stock index--which had risen 1.2% last week--was off 408.69 points, or 2.7%, to 14,889.51 at midday. "Russian instability and U.S. market volatility" are pressuring the market, said Dhia Amir, senior trader at Nomura Securities Co. in Tokyo.

Asia's economic turmoil spilled over to Mexico on Friday, helping push the peso to a record low and driving the leading stock market index to its weakest close since May 1997. Despite what are widely regarded as sound Mexican economic fundamentals, the peso slipped to a closing 9.07 to the dollar, down 0.8% from Thursday's close of 8.99. The previous record low close was 9.04 pesos June 11. On the stock market, the Bolsa's key IPC Index fell 3.44% to close at 3844.

The mother of all currency devaluations--by China--is being treated as increasingly likely across Asia as the Chinese economy deteriorates, Japan withers and speculators ramp up pressure on the Hong Kong dollar. Such a step would probably trigger a string of competitive devaluations across Asia, with devastating consequences for the region and the U.S. and global economies.

The U.S. economy was operating at a healthy pace through July, but growth showed signs of slowing as slumping exports to Asia and shortages of employees were felt across the country, the Federal Reserve Bank said Wednesday. "Despite the high level of economic activity in recent weeks, many districts noted that labor shortages, shipping bottlenecks and continued weakness in East Asia were beginning to temper growth in their regions," the Beige Book economic summary said.

It is a doomsday scenario too real for Hollywood: The financial meltdown of a little-noticed Southeast Asian country pushes Japan to the edge of collapse, bringing the rest of the industrial world down with it. To most economists, this notion of a global recession still seems highly unlikely. If minuscule unemployment and soaring consumer confidence mean anything, the U.S. economy seems a bulwark against global havoc. But Friday's report confirming an abrupt slowdown in the U.S.

Stocks fell sharply again Tuesday worldwide--driving the Dow Jones industrial average to its lowest point in five months--after investors were rattled anew by the deepening economic problems in Asia. But a late rally enabled the U.S. market to avoid an even worse drubbing, and to end the day with much smaller losses than those suffered by many markets in Asia, Europe and Latin America. Some U.S. market watchers suggested that the worst of the recent selling pressure might be abating.

Stocks fell sharply again Tuesday worldwide--driving the Dow Jones industrial average to its lowest point in five months--after investors were rattled anew by the deepening economic problems in Asia. But a late rally enabled the U.S. market to avoid an even worse drubbing, and to end the day with much smaller losses than those suffered by many markets in Asia, Europe and Latin America. Some U.S. market watchers suggested that the worst of the recent selling pressure might be abating.

Like a vortex, the global market collapse driven by Moscow's political and economic tumult last week promises to prolong and deepen the Asian crisis that helped trigger Russia's woes in the first place.

Manufacturing executives predict a modest slowdown in orders and hiring over the next three months, partly due to Asia's ongoing economic troubles, according to a Dun & Bradstreet Corp. survey released Thursday. The findings differ from a separate Dun & Bradstreet survey of construction executives, who believe employment levels will improve significantly in the coming months. The Murray Hill, N.J.-based financial information company found in its July survey of 1,000 U.S.

A currency devaluation by Vietnam sparked fears that China and other Asian nations would also devalue their currencies, moves that could worsen the region's economic crisis. Such fears triggered sharp declines in several Asian stock markets today, with Hong Kong's benchmark Hang Seng stock index falling in early trading as much as 2.7% to its lowest level since January 1995. Stocks also tumbled in Malaysia, Singapore and the Philippines.