Southeast Asian markets recorded healthy returns for a week that was dominated by progress suggesting that U.S. financial policy could remain easier than previously assumed. On Monday, stocks moved greater on news that Lawrence Summers had retreat from the race to become the successor of Ben S. Bernanke as the next chairman of the Federal Reserve — a candidate expected to depreciate the central bank’s stimulus soon after taking the post. Then on Thursday, markets received another lift from the Fed’s unexpected decision to keep its financial policy steady, going versus widespread expectations for the bank to start trimming down its bond-buying program. The end result was substantial gains for Southeast Asian markets that had been beaten down over the summer. The fear of a removal of U.S. stimulus efforts, which had supported these small markets in recent years, prompted investors to pull their money out of countries like Indonesia and the Philippines. The advances this week supported the recovery of these markets: Indonesia’s JSX is 6.8% greater since last Friday and Thailand’s SET leaped 6.3% over the same time. On Friday, Asian stocks took a pause after their powerful advances in the previous session: Australia’s S&P/ASX 200 missed 0.3% and Japan’s Nikkei bolstered 0.2%. “Today looks like being one of those Fridays where markets take stock after a big news week,” said Ric Spooner, chief market analyst at CMC Markets. “We may see some profit-taking by short term sellers disappointed that yesterday’s strong upward momentum was not followed through,” Spooner added. The U.S. dollar consolidated in Asia after it strengthened versus the yen on Thursday. The greenback was at ¥99.47 early Friday, after a 1.6% increase in the previous session. In Tokyo, real estate firm Mitsubishi Estate Co. rallied 0.6% after the average land price in greater Tokyo, Osaka and Nagoya inched up 0.1% on year as of July 1, the first on-year rise in five years. Also in Tokyo, retailer Aeon Co. relinquished 0.6% after a Nikkei report said that the company’s consolidated operating profit for the six months ending Aug. 31 will likely fall short of market consensus. Much of North Asia was closed for public holidays on Friday, with Mainland China, Hong Kong and South Korea all closed for a public holiday. Markets in Shanghai and Seoul were closed on Thursday as well, which means that they have not yet had a chance to react to the Fed’s latest policy decision.
