Asia Might Weather Market Turmoil
Market turmoil in the U.S. sent shock waves as far as Asia, a sign of the close connection among distant financial markets. But many analysts say the region's economies might suffer far less damage, a feat that would show they have become less dependent on the American economy.</br></br>Troubles in the U.S. market for subprime mortgages have triggered a widespread flight from risk and driven down financial markets around the world. In an effort to calm the markets, Japan's central bank is expected to leave its short-term interest-rate target at 0.5% this week, rather than raising it as previously expected.</br></br>But barring any major broadening of the credit crunch, the effects on Asia's real economies -- things like production aimed at consumer spending and exports -- could be relatively modest, analysts say, even if the turmoil triggers a slowdown in the U.S. That's because, by many measures, Asian economies appear to be growing less reliant on the U.S.</br></br>Indeed, less than a week after the U.S. market's most violent movements, China's central bank raised its key interest rate yesterday because strong growth is driving up inflation.</br></br>Meanwhile, many Southeast Asian countries are benefiting from investment aimed at their domestic markets. For the first time since the 1997-98 Asian financial crisis, Indonesia's government is planning to finance projects to improve the country's transportation and energy infrastructure. Indonesian companies also are gearing up for expansion.