Greek parliament approves austerity, Japanese economy shrinks

The Greek austerity bill was approved by parliament on Sunday amid spreading violence. Reuters reports:

Greece's parliament approved a deeply unpopular austerity bill Monday to secure a second EU/IMF bailout and avoid national bankruptcy, as buildings burned across central Athens and violence spread around the country.

Cinemas, cafes, shops and banks were set ablaze in central Athens and black-masked protesters fought riot police outside parliament before lawmakers voted on the package that demands deep pay, pension and job cuts - the price of a 130 billion euro bailout needed to keep the country afloat.

On Monday, Japan reported that its economy shrank in the fourth quarter. Again from Reuters:

Japan's economy shrank a bigger-than-expected 0.6 percent in October-December, hurt by slowing global growth, Thai floods and a strong yen, casting doubt about expectations that growth will resume this quarter as Europe's debt crisis clouds the outlook.

Domestic demand also weakened in a worrying sign that the economic boost from rebuilding the country's earthquake-devastated northeast coast is slow to materialize.

The weakness in the economy at the end of last year has not stopped the Japanese stock market from rising at the start of this year. From Bloomberg:

Japan’s benchmark Topix index has climbed 6.9 percent this year, following a 19 percent slump in 2011, partly on optimism the losses at consumer electronics makers would accelerate job cuts and an exit from money-losing businesses.

The rally also shows analysts are looking beyond the gloomy economic and earnings forecasts for the current fiscal year, said Mark Matthews, head of research for Asia at Bank Julius Baer & Co. in Singapore. The gains by shares in Asia this year have further to go, he said.