The imposition of negative rates on Japan’s bank reserves recently caught the market by surprise. Teresa Kong, CFA, Portfolio Manager, explores the possible implications of this new interest rate policy for Japan and the rest of Asia.

When the U.S. Federal Reserve finally lifted the key rate by a quarter point on December 16, it was arguably the most widely anticipated rate hike in U.S. monetary history. This Fed liftoff matters precisely because no other major central bank in the world has the ability to do it. This marks the end of ZIRP (zero interest rates policy) for the U.S. But every other central bank is in ZIRP or is heading in that direction.

What are the factors that prompted Chinese authorities to recently devalue the renminbi? Matthews Asia Portfolio Manager Teresa Kong, CFA, examines the lead up and implications of this development.

A power equipment maker just became China’s first state-owned company to default on domestic debt. Is this a strategic move by the central government to further liberalize its capital markets, and to reform its state-owned enterprises?

China has revised its solar energy targets several times in recent years. This year, it has set even more aggressive targets for solar deployment. But it still has a long way to go before large-scale adoption is possible. This week, Teresa Kong writes about her visit to a small town outside of Beijing to see a Greenpeace solar project that is encouraging households and enterprises to consider going green. What are the barriers to smooth implementation?

The gyrations in Chinese money markets in the last few weeks have caused much alarm in the financial press. The moves in these markets are not only inline, but healthy for an economy looking to increase the role of the market in allocating resources. Those who believe these moves indicate financial stress, or draw parallels between the recent volatility and that which preceded the subprime crisis in the U.S., might be looking through the wrong end of the telescope.

The gyrations in Chinese money markets in the last few weeks have caused much alarm in the financial press. The moves in these markets are not only inline, but healthy for an economy looking to increase the role of the market in allocating resources. Those who believe these moves indicate financial stress, or draw parallels between the recent volatility and that which preceded the subprime crisis in the U.S., might be looking through the wrong end of the telescope.

Wages in China have surely risen, and some pundits argue that this growth will eventually make the country less competitive. But more nuanced and recent theories suggest that manufacturing centers can cluster around pools of more skilled labor, transportation networks and economies of scale. This month, Teresa Kong, CFA, examines the reasons why China is about more than just low-cost workers.

While yields have come off their historical lows in the U.S. and Asia, there is substantially more room for rates to continue to rise. In terms of credit spreads, we have seen investment grade and high yield spreads widen. We believe that spreads will have some room to widen given a repricing of risk across the globe.