Asian (Positive) Contagion - EM FX, Bonds, Stocks Surging

First, the bad news; the un-Taper-inspired collapse in the USD is not helping the JPY weakness that Abe desires and the NKY is now 200 points off its US day-session highs (though still green from yesterday) and the JASDAQ is red. But everywhere else there is much rejoicing... EM FX is back at 5 to 6 week highs with MYR, INR (fwds), and IDR all having major surges. Equity markets are green in general but the Philippines PSEi (+3%) and Indonesia's JCI (+4% but was +7.7% at one point) are an illiquid mess of over-exuberance. Gold, US Treasuries, and US equity futures are all holding gains or inching slightly better. Thai bonds are 22bps lower in yield, Indonesia -10bps, but Indian bonds for now are quiet. MSCI's AsiaPac Ex-Japan equity index is now back at highs from May 2011, having risen 12 of the last 16 days for a 9.7% gain. While the moves are large, they are not unprecedented and certainly don't signal a wholesale charge back in of new hot-money since volumes remain on the low side for now.

The Nikkei is not all that happy... trading below the US close still...

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