Tokyo Doubts about the rapid development of a corona drug and sobering economic data from the United States put the mood of Asian investors at the end of the week.
In Tokyo, the 225-strong Nikkei index was 0.9 percent lower at 19,262 points in the trade. On a weekly basis, it is 3.2 percent in the red.
Meanwhile, Japanese Minister of Economy Yasutoshi Nishimura is nevertheless optimistic about the government’s new stimulus package. The package in the fight against the consequences of the corona crisis should push the economy strongly. It will increase gross domestic product by about 4.4 percent, said Nishimura on Friday.
The government had raised the stimulus package to a record $ 1.1 trillion. This is intended to expand cash payments to citizens, for example. The coronavirus pandemic threatens to plunge the world’s third largest economy after the United States and China into recession.
Disappointing test results weigh on markets
The courses also fell in China. A report on disappointing test results for the US company’s Remdesivir drug depressed sentiment Gilead in a study in China to treat Covid-19. Gilead said that the study was terminated prematurely due to a lack of participants and was therefore not statistically meaningful.
The fact that reports of corona drugs triggered such strong market movements is an indication of how much investors are looking for signs when the crisis is over, said Tim Ghriskey, chief strategist at Inverness Counsel. “Any bad news should shake the market.”
The country’s Chinese central bank has meanwhile cut another of its key interest rates. The interest rate for medium-term loans will be reduced to 2.95 from 3.15 percent, she said in Beijing on Friday.
Commercial bank loans mature after one year, but can be extended to another two years. The central bank had recently turned the interest rate screw several times to boost the Chinese economy with cheaper money. This contracted by 6.8 percent in the first quarter due to the Corona crisis. This was the first minus since the beginning of the quarterly statistics in 1992.
The pandemic is causing the global economy to collapse. Business activity in the USA fell to a record low in April, and things look bleak in Asia and Europe as well.
In Germany, the Ifo index will be presented in the morning, experts are also expecting a slump here. To keep the US economy alive, the US House of Representatives gave the go-ahead on Thursday for another $ 484 billion aid program. US President Donald Trump said it was possible that the distance rules would have to be extended until the summer.
More: Read all current developments regarding the corona pandemic here.