Page 24 - ARUBA TODAY

Tuesday 5 sepTember 2017 BUSINESS
A24

Global stocks slip on concern over North Korean nuclear test

U.S. markets were closed cause markets still do not
for Labor Day. expect any military escala-
NORTH KOREA: North Korea tion in the near-term.”
said it successfully tested a ASIA’S DAY: Japan’s
hydrogen bomb. benchmark Nikkei 225
U.S. Defense Secretary Jim edged down 0.9 percent
Mattis responded by saying to finish at 19,508.25, while
that the U.S. will answer any Australia’s S&P/ASX 200 lost
threat from the North with a 0.4 percent to 5,702.00.
“massive military response South Korea’s Kospi dipped
— a response both effec- 1.2 percent to 2,329.65.
tive and overwhelming.” Hong Kong’s Hang Seng
President Donald Trump slipped 0.9 percent to
threatened to halt all trade 27,703.67, but the Shanghai
with countries doing busi- Composite rose 0.4 percent
ness with North Korea, a to 3,379.58.
warning to China, and ENERGY: Benchmark U.S.
faulted South Korea for its crude gained 18 cents to
“talk of appeasement.” $47.47 a barrel in electronic
THE QUOTE: “Korean ten- trading in New York.
sions are elevated again,” It added 6 cents to $47.29 a
said Chang Wei Liang from barrel on Friday.
People under umbrellas walk by an electronic stock board of a securities firm in Tokyo, Monday,
Sept. 4, 2017. Asian shares were mostly lower Monday, on investor jitters shaken up by a North the Singapore Treasury Divi- Brent crude, which is used
Korean nuclear test over the weekend that raised fears about risks to regional stability. sion at Mizuho Bank. to price international oils,
(AP Photo/Koji Sasahara) “While U.S. Defense Sec- fell 34 cent to $52.41 a bar-
By YURI KAGEYAMA end raised fears about to close at 5,103.97 and retary Mattis warned of a rel in London.
AP Business Writer regional instability and as Germany’s DAX lost 0.3 ‘massive military response’ CURRENCIES: The dollar fell
TOKYO (AP) — Global trading volumes remained percent to 12,102.21. if the U.S. or its allies are to 109.60 yen from 110.04
stocks mostly fell on Mon- thin due to a U.S. holiday. Britain’s FTSE 100 edged threatened, risk-off senti- yen late Friday.
day after a nuclear test by KEEPING SCORE: France’s down 0.4 percent to ment this morning is not un- The euro rose to $1.1919
North Korea over the week- CAC 40 slipped 0.4 percent 7,411.47. duly excessive, largely be- from $1.1907.q

Taper tiptoe: Strong euro complicates ECB’s stimulus plans

By DAVID McHUGH expectations. Analysts are run out of eligible bonds to
AP Business Writer now wondering whether purchase next year.
FRANKFURT, Germany (AP) Draghi will reveal very “While a clear tapering hint
— A strengthening euro is much or anything at all in at this week’s ECB meeting
complicating the Europe- terms of concrete guid- could send the euro even
an Central Bank’s efforts to ance for when to start higher, potentially under-
scale back and then exit phasing out the stimulus — mining the recovery, room
from its monetary stimulus for fear of driving the euro to postpone tapering is lim-
efforts. even higher. ited due to bond scarcity,”
For weeks, financial inves- The stimulus program is said Carsten Brzeski, chief
tors had been expecting credited with helping turn economist for Germany
the bank and its presi- around the 19-country eu- and Austria at ING bank.
dent, Mario Draghi, to give rozone economy, which “Therefore, we expect
some signal after their pol- is now growing at a brisk Draghi to strike a cautious
icy meeting on Thursday pace. So investors are keen balance between giving
about when they expect to know when the program first clear hints about the
to start winding down the will start being wound In this Sept. 1, 2017 photo the sun sets behind the bank skyscrapers upcoming tapering and
stimulus program. down, and how quickly. in Frankfurt, Germany. A strengthening euro is complicating the dovish sounds in order to
But a recent surge in the In the past, talk of taper- European Central Bank’s efforts to scale back and then exit from calm” foreign-exchange
euro, which can hurt ex- ing off stimulus has caused its monetary stimulus efforts. markets. “Dovish” is central
ports and weigh on the stocks to fall and the euro ( Frank Rumpenhorst/dpa via AP) bank jargon for being in-
economy, and the fact to rise. and briefly traded above er returns for savers and clined toward more stimu-
that inflation remains be- The euro has gained 13 $1.20 last week. The ex- more borrowing costs for lus rather than less.
low the 2 percent target percent in value this year change rate jumped after governments and business- The central bank has been
have dampened those against the dollar, to $1.19, Draghi said in June that es — including some zom- purchasing government
the ECB would ease off its bie companies that have and high-quality corporate
stimulus in tandem with a been kept afloat thanks to bonds since March 2015 in
recovering economy. low rates. an effort to push up inflation
An end to the stimulus Yet Draghi can only post- from alarmingly low levels.
would mean higher long- pone the stimulus exit for The ECB buys the bonds
term interest rates, and so long. That is because from banks using newly
more returns for holding the program consists of 60 created money, pushing
euro-denominated fixed- billion euros ($72 billion) that added money into the
income investments; that per month in purchases of banking system and, it is
tends to drive up demand government and corpo- hoped, into the economy
for the currency. A stimulus rate bonds. And analysts through credit to business-
exit would also mean high- estimate that the bank will es and consumers.q