Japan dips into recession following G20 mediocrity
Dominique Strauss-Kahn, Managing Director IMF
World stock markets were rattled Monday as recession spread to Japan, overshadowing a weekend summit in Washington that was aimed at calming the economic crisis.
Leaders from the Group of 20 rich and emerging nations pledged to work together to restore global growth and overhaul the world’s financial system, but stopped short specific measures such as coordinated stimulus spending.
Investors gave a lukewarm response and focused instead on global recession after news that Japan’s economy shrank for two straight quarters — the technical definition of a recession.
Despite the gloomy news, Tokyo’s stock market closed up 0.71 percent on Monday as investors hunted for bargains, dealers said.
Markets showed little enthusiasm for a vague pledge on Saturday from Group of 20 (G20) leaders to join forces to galvanize growth and overhaul the world’s financial architecture.
“The muted response of financial markets to the outcome of the G20 meeting suggests that little was priced in terms of expectations for concrete policy measures,” said Barclays Capital analyst David Woo.
Well – no surprises there, folks. Photo ops have passed.