Isaho Nakasho Asian Quotations

Japan is still at a very nascent stage of recovery from the long market slump and that recovery will continue into 2006. A market gain in Japan may also have some positive ripple effects on neighboring Asian markets.

Given the prospect of an end to the U.S. interest-rate increases next year, stocks globally will be in favor. Some of the export-driven Asian markets such as Korea and Singapore will be the biggest beneficiaries.

Rising oil prices raise concern U.S. consumption will slow, leading to worries that exports from some Asian countries will shrink, and worsening the region's growth outlook. The higher fuel costs may also lead to concern corporate profits will be squeezed. These encourage foreign investors to sell the regional equities.