Irish Bailout Instills Confidence in Japanese Investors

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In Asia Monday, Japan's Nikkei 225 Index climbed 0.9% to end the day at 10,115. In Hong Kong the Hang Seng Index inched down 0.3% to 23,524 and in China the Shanghai Composite dipped 0.1% to 2,884.

The ripple effect of Ireland's acceptance of an international bailout to the tune of some $130 billion was felt in Asia, where it gave investors confidence that the European financial situation will stabilize.

The rescue package may prevent a run on Irish banks, which have been hemorrhaging money in the past few months thanks to faltering confidence. According to the Irish Examiner, businesses and institutions have withdrawn more than €23.5 billion from Irish banks so far this year, but that individual account holders haven't yet been pulling out funds. Many hope that rescuing Ireland will prevent contagion among other E.U. nations, but there's clearly a possibility that Europe's debt crisis may not be over yet.

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Today's strengthening of the euro sent shares in Japanese exporters higher. Among car makers Isuzu motored up 3.5%, Fuji Heavy Industries, maker of the Subaru brand, soared 2% and Toyota gained 1.1%.

Electronic equipment maker Kyocera surged 2.4% and Advantest, a semiconductor testing company climbed 2.1%. Meanwhile, camera makers also rallied, with Olympus, which also makes optical medical equipment, jumping 1.7%. Nikon advanced 1.5% and Canon gained 1%.

Petroleum companies also rose as the price of oil advanced. Inpex leaped 3.6% and Japan Petroleum Exploration was up 3.3%.

Even Tougher Controls on HK Real Estate


In Hong Kong, it was all about property. New and even tougher controls have been put in place by the government to cool the market, including a new stamp duty on homes flipped within six months of purchase, and a requirement for buyers of homes costing $1.55 million and up to put down 50% as a down payment -- a hike of 10%. According to Bloomberg, The immediate impact of the changes were a decline of 83% in weekend home sales, as compared to the week before.

Today Sun Hung Kai and Cheung Kong both tumbled 3.1%, Henderson Land slumped 2.1%. Sino Land, with projects underway from Kowloon, to the Mid-Levels to Repulse Bay, nosedived 5.6%.

Hong Kong-listed retailers were among those that gained, with shoe company Belle International rising 2.4% and Li & Fung, Bruce Rockowitz's distribution goliath that supplies Asian-made merchandise to the likes of Wal-Mart, Target and Abercrombie, gaining 2.3%.

In China, banks declined after reserve ratios were boosted yet again. China Construction Bank sank 2.3%, Bank of Communications edged down 2.1%, China Minsheng Banking dropped 2% and Agricultural Bank of China dipped 1.1%. Predictably, real estate firms also fell, on worries that banks will reign in mortgage lending. China Vanke slumped 1.8%, Gemdale slid 1.3% and Poly Real Estate lost 1.2%.
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