Japan managed to get out of recession in the fourth quarter of 2004, according to the latest data released yesterday.
Japan's GDP grew 0.1% in the three months to December
Japan's gross domestic product grew 0.1 percent in the three months to December from the previous quarter, according to revised data released Monday, up from an original estimate of a 0.1 percent contraction. On an annualised basis, the world's second-largest economy grew by 0.5 percent, compared to the initially reported drop of 0.5 percent in the first estimate released on February 16, the Cabinet Office said.
The revision showed positive growth after a contraction for two straight quarters, the widely accepted technical definition of a recession...
So there's still life in the economic expansion, but it will probably pay to be selective in investing from here on.
Speaking of which, Merrill Lynch has recently done some re-juggling of its market preferences. It has upgraded Chinese stocks but downgraded Thailand and Taiwan's.
Around Asia's markets: Thailand vs. China: Merrill lays a bet
Investors should buy Chinese stocks because earnings will probably exceed estimates, and they should sell Thai shares after a four-month rally pushed the benchmark index to a one-year high, according to Merrill Lynch.
Spencer White, the firm's chief Asian strategist, raised China's weighting in Merrill's country asset allocation model for Asia excluding Japan to 8 percent from 4 percent. He cut Thailand to 1.5 percent from 5 percent...
Merrill Lynch Downgrades Taiwan To "Market Weight"
Merrill Lynch & Co. has downgraded its rating on Taiwan to "market weight," citing expectations of "sustained retail selling" in the island's stock market through mid-May.
While the U.S. investment bank said both Taiwan's benchmark stock index and the technology sector will outperform in 2005, the local tax season typically spurs investors to sell off some of their holdings...
In Singapore, the climate may be turning even more sinister for stocks: interest rates are on the rise.
Housing mortgage rates in Singapore rising
Housing mortgage rates in Singapore are on the rise... UOB announced on Monday that it had raised its board rate by a quarter percentage point for new home loan customers. DBS will do the same, starting May 1. Over the weekend, Standard Chartered Bank said it would raise mortgage rates by half a percentage point for private homes. This is the second rate hike by Standard Chartered Bank this year. Just last month, OCBC announced that it would hike its board rate by 30 basis points to 5.8 percent from March 29...
Yesterday, I had recommended caution in investing in Singapore stocks in my commentary entitled "Singapore stock market flashes warning". The rise in interest rates may just be further evidence that the cycle has turned against Singapore stocks.