U.S. Krugman Advises Japan’s Abe to Delay Rate Hike
On Tuesday, an economist advised Shinzo Abe, Japan’s Prime Minister, to delay raising of sales taxes proposed for the following year and improve fiscal spending as the economy remained steady to prevent deflation.
Abe consults economists in order to prepare for a Group of Seven summit that will be organized by Japan in May. Meanwhile, G7 countries were also called by Krugman in order to coordinate stimulus measures as numbers of developed and emerging economies remained threatened with a low demand.
Ahead of the same advices from Krugman and Stiglitz, suggesting that the expectations of Abe using the G7 talks as a platform in order to delay tax increase and up fiscal spending remained solid.
Krugman stated that the country has not yet attained the escape velocity to get away from deflationary cycle. Thus, he advised for a delay in the consumption tax hike as he implies that the country needs fiscal policy in order to reinforce monetary policy.
Oil Futures Slumps
Oil prices declined after the U.S. crude stockpiles rallied last week, suggesting global supply concerns to remain steady.
The U.S. crude futures for the front-month contract dropped by about 47 cents, hitting $40.89 a barrel. It posted a high of $41.90 in the earlier session, before closing at $41.45. The contract has increased over 50 percent since hitting its lowest level in 2003.
Meanwhile, Brent crude posted plunges of 45 cents, to trade at $41.34, retreating gains in the prior session after closing at $41.79.
Subsequently, Brent also added over 50 percent since hitting a multi-year low of $27.10 a barrel last January.
Belgium Bombings Drag Down Asian Shares
Shares of Asia remained weaker on Wednesday, led by Belgium attacks, which drops investors’ sentiment.
On Tuesday, the risk sentiment took a hit after the explosions ripped the departure hall of Brussels airport, over 26 people were killed, while 35 of them were injured. However, it didn’t stop there, another blow hit metro station in the capital afterwards.
The tragic attack happened four days after the suspected participant was arrested in Brussels. The alleged participant is suspected to be involved in the November militant attacks in Paris that killed about 130 people.
Meanwhile, the Nikkei 225 dropped 0.28%, while the S&P/ASX 200 remained steady at 0.47%, and the Shanghai Composite lost 0.08%.Publication source