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Market Roundup 27 September 2024
The People's Bank of China (PBOC) has taken bold steps to lower borrowing costs and increase lending, a move that is expected to inject approximately 1 trillion yuan into the economy. This stimulus comes at a crucial time as China seeks to meet its growth targets amidst a series of disappointing economic data.
Thailand’s SET Index dropped 0.34% to 1,450.15 points as investors awaited US economic data. China reduced the reserve requirement ratio to boost growth. Japan’s LDP elected Shigeru Ishiba as its new leader.
Thai Stock Market Decline
Thailand’s SET Index closed at 1,450.15 points, a decrease of 4.88 points or 0.34%, with a trading volume of 60.56 billion baht. Analysts noted a brief pause after the index climbed approximately 200 points from this year’s low, as investors awaited the US August PCE figures. The market is expected to remain within a range next week, with investors focusing on US nonfarm payrolls.
Economic Measures in China and Japan’s Political Transition
China’s central bank announced a second RRR reduction by 50 basis points this year, aimed at bolstering economic growth amidst deflationary challenges. This applies to all banks except those with a 5% reserve ratio. Major cities like Shanghai and Shenzhen are easing home purchase restrictions to attract buyers. Meanwhile, Shigeru Ishiba won the race to lead Japan’s ruling LDP, positioning him to succeed Prime Minister Fumio Kishida.
China’s Stimulus
In the face of economic headwinds, China has recently unveiled a comprehensive stimulus package aimed at rejuvenating its economy. The People’s Bank of China (PBOC) has taken bold steps to lower borrowing costs and increase lending, a move that is expected to inject approximately 1 trillion yuan into the economy. This stimulus comes at a crucial time as China seeks to meet its growth targets amidst a series of disappointing economic data.
The measures include a reduction in the reserve requirement ratios (RRR) for banks, potentially followed by further cuts later in the year. Additionally, efforts to revive the property market are underway, with reduced interest rates for existing mortgages and lowered minimum down payments for homes. These actions reflect a proactive approach to counter the economic slowdown and mirror similar efforts by other global economies, such as the recent interest rate cut by the US Federal Reserve.
Japan’s Democratic Resilience
On the political front, Japan is undergoing a period of introspection and renewal. Despite the dominance of the Liberal Democratic Party (LDP) since the 1950s, Japan’s democracy remains robust, characterized by strong institutions, regular elections, and a free press. The recent smooth transition of power from Emperor Akihito to Emperor Naruhito in 2019 exemplifies the nation’s stable democratic practices. However, concerns over voter apathy and the weakening of opposition parties signal challenges to the vibrancy of Japan’s democratic system.
Japan’s political stability has been a cornerstone of its success, yet the need for democratic dynamism is evident. The country continues to play a pivotal role in promoting liberal internationalism, advocating for the inclusion of democracies in Asia’s regional architecture, and fostering security cooperation with like-minded nations.
As both nations navigate their respective economic and political landscapes, the international community watches closely. China’s economic measures and Japan’s political resilience will undoubtedly have far-reaching implications, not only for their domestic affairs but also for the broader geopolitical dynamics of the region. The outcomes of these initiatives will be a testament to the adaptability and foresight of these two influential Asian powers.
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