BY ALEX FRANGOS

As the Euro Zone Flirts With Disaster, Asian Economies Stand at Varying Degrees of Preparedness

HONG KONG—Greek elections may have assuaged fears of a European financial contagion spreading to Asia, at least for the moment. But as troubles brew in Spain, where borrowing costs shot up again Tuesday, and as Greece faces more painful cuts to meet bailout targets by September, many wonder who in Asia is most exposed should Europe’s economy and financial system finally crack.

Lessons from the 2008 financial crisis show that while all of Asia tends to get hit when the world economy shudders, the severity differs depending on which countries have the biggest trade and financial linkages to the rest …

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By Dominic Lau TOKYO, June 21 (Reuters) – Japan’s Nikkei average broke above 8,800 for the first time in five weeks on Thursday, as sentiment was buoyed by a softer yen after the U.S. Federal Reserve held back from more aggressive stimulus steps to prop up the economy.

The benchmark Nikkei hit its highest closing level since May
17 and has recovered 7 percent from a six-month low on June 4.

Shrugging off a survey showing China’s vast manufacturing sector slowing for the eighth straight month, the Nikkei rose 0.8 percent to 8,824.07, driven by exporters, such as Honda Motor Co Ltd, up 3.5 percent, and Canon Inc, adding 1.4 percent. The Fed disappointed some investors by delivering only a limited expansion of monetary stimulus on Wednesday. It extended its “Operation Twist” beyond its original June expiration to the end of the year to boost the flagging U.S. recovery. It also cut its GDP growth estimates for the year.

“The fact they eased at all is a plus for the U.S. economy, while holding off on QE3 is good for the Japanese market as it didn’t strengthen the yen,” said Hideyuki Ishiguro, assistant manager of investment strategy at Okasan Securities.

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By Chris Oliver, MarketWatch

HONG KONG (MarketWatch) — Evergrande Real Estate Group Ltd. was drawn into the controversy over questionable accounting practices at listed Chinese companies Thursday, as its board denied allegations of financial impropriety leveled by the Los Angeles–based stock-commentary website Citron Research.

Evergrande
Signing ceremony for the development projects of Chongjiang Jiangjin Evergrande Splendor International Skiing Health Resort and Chongqing Yucai Middle School n January 2012.

The Hong Kong–listed shares of Evergrande HK:3333 -11.38%  EGRNF -6.14% ended down 11.4% at 3.97 Hong Kong dollars (51 U.S. cents), shedding 51 Hong Kong cents from its previous session’s close, and paring an earlier, steeper drop of as much as 88 Hong Kong cents.

Citron said in summary research posted on its website that it had concluded that Guangzhou-based Evergrande is “essentially an insolvent company that has consistently presented fraudulent information to the investing public.”

By Bloomberg News – Jun 21, 2012

A worker sews shirts at a factory in Shenzhen, Guangdong province, China.

China’s manufacturing may shrink for an eighth month in June, matching the streak during the global financial crisis in a signal the government’s stimulus has yet to reverse the economy’s slowdown.

The preliminary reading was 48.1 for a purchasing managers’ index today from HSBC Holdings Plc and Markit Economics. Above-50 readings indicate expansion. The lowest crisis level was 40.9 in November 2008, when industrial production increased 5.4 percent from a year earlier, compared with a gain of 9.6 percent last month.

Today’s report contrasts with comments by officials expressing confidence growth will rebound, with President Hu Jintaosaying in remarks published June 17 that China has taken “targeted measures” to boost domestic demand. Asian stocks fell and the yuan weakened for a second day against the dollar.

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