Doubts regarding the durability of the recoveries made by two of Asia’s biggest economies pulled the region’s stocks down on Friday. Japan’s inflation figures released on the day gave a mixed bag of indications about the effectiveness of Prime Minister Shinzo Abe’s strategy to revitalize the economy. The Asian market down slide was further fueled by the refusal of the central bank of China to inject funds into the money markets.
Investors watching for ‘Abenomics’
Japanese inflation figures released showed that the consumer price index in the region increased for a fourth straight month in September owing primarily to the higher costs of importing food and energy. In light of this, investors are now carefully watching for signs whether ‘Abenomics’ can sustain its effects and cause a lasting economic recovery in Japan.
Although, the Chinese markets seemed to have recovered somewhat in September, with the central bank now refusing to inject money, investors are worried over liquidity crunch that will push lending rates upwards.