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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