Good morning. Here's my take on some of the stories driving the debate in politics, finance and social issues across Asia today:
Bank of Japan's surreal market power.
Iraq's implosion is big news in Japan -- just not its bond market. It's a familiar theme as hedge fund managers mull the death of market liquidity. The Bank of Japan's unprecedented asset buying spree has essentially paralyzed the debt market. Trading has all but stopped and price ranges are stuck in their tightest ranges ever. That's carrying over into the stock market, where trading volumes are disappearing. The fact that BOJ Governor Haruhiko Kuroda has become the biggest player in Japan's $9.6 trillion bond market raises troubling questions, not least of which is whether the central bank can ever step away from a market it now effectively owns.
Modi digests daunting to-do list.
There's good news and bad in Narendra Modi's weekend policy speech. The good: India's new prime minister appears to get just how daunting a task voters have entrusted to him. As Modi said: "To take the country out of its economic ill-health, taking hard decisions and administering a bitter pill when required, will be necessary." The bad news is how those problems are growing as we speak, including inflation that's rapidly eroding the purchasing power of more than 800 million people who survive on less than $2 a day. Time to deliver that tough love quick.
Is Australia calling Obama's bluff?
Much as I'd love to dismiss Canberra's doubts about the success of President Barack Obama's climate-change plan, Tony Abbott has a point. The Australian prime minister's chief trade-deals negotiator, Andrew Robb, says "there's no action associated" with Obama's pledge to reduce power-plant discharges by 30 percent by 2030 from 2005 levels. It could be personal, of course, coming days after former Vice President Al Gore said "history won't be kind" to climate-change deniers like Abbott. Still, Obama must indeed work harder to make his rhetoric about seizing the mantle of environmental leadership from Australia a reality. It's the only way to get China and India to act.
Philippine stock exchange lags economy.
Here's an intriguing disconnect: the powerful rally in Philippine stocks (up 18 percent from its August 2013 low) is leaving shares in the nation's equities exchange behind. What gives? A lack of liquidity, for one thing. The corresponding 3.5 percent drop in Philippine Stock Exchange shares also reflects disappointment over stalled merger talks with the nation's bond bourse. Or is this a sign that the nation's stock rally is outpacing improvements in growth and corporate governance, with the PSE taking the hit first? Time will tell.
How fallen icon embodies Cambodia.
Perhaps Somaly Mam was always too good to be true. She became the face of Cambodia's devastating human-trafficking and sex trade with a harrowing tale of rising from poverty, orphanhood and the brothel to rubbing shoulders with world leaders and celebrity activists like Susan Sarandon. Her star has fallen amid reports that parts of her life story were falsified. But as this New York Times feature argues, Mam's tale "highlighted what aid workers here say is widespread embellishment and in some cases outright deception in fund-raising, especially among the country's orphanages."
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