Asian and Pacific Rim sentiment in the financial markets dipped lower Wednesday morning after the chief economist from the International Monetary Fund (IMF) delivered a warning about the global economy.
IMF Chief Economist Gita Gopinath said that the global economy could see a contraction far worse than previously forecasted. This dented Asian sentiment and sent equities and other risk-on assets lower.
In Japan, the headline Nikkei 225 index was down 0.6 percent by the late morning. In Tokyo, the broader Topix index was down 0.41 percent.
Japanese economic data, released early on, showed that for the month of May, exports plummeted 28.3 percent year on year. This is provisional trade data released by Japan’s Ministry of Finance.
Across the Korean Strait, in South Korea, the Kospi composite index was down a fraction of a percent and elsewhere in the Asian and Pacific Rim, the Australian S&P ASX 200, bucked the regional trend, as shares tacked on 0.16 percent.
In Hong Kong, the Hang Seng index was up over 0.2 percent and the equity markets on the Chinese mainland were fairly flat on the morning.
Asian Traders Digest Commentary from the IMF
Overnight, IMF Chief Economist Gita Gopinath said that “the forthcoming June World Economic Outlook Update is expected to show negative growth rates even worse than previously estimated.”
Dr. Gopinath also said that the so-called “Great Lockdown,” from the Covid-19 pandemic, is “unlike anything the world has seen before.”
Global governments, for the first quarter of the year, imposed strict lockdown measures to prevent the spread of the virus. This literally froze economic growth and activity. Many countries are starting to reopen, slowly, but there have been a spike in new coronavirus cases which could lead to new lockdown measures.
Traders also Watch Covid-19 Vaccine News
On Tuesday, it was announced that a trial using dexamethasone, which is already in widespread use, could help those critically ill with Covid-19 symptoms.
The trial said that patients using dexamethasone saw a decline in death by at least one third. Data is still being compiled and analyzed.