Japan’s growth to benefit Southeast Asian nations

Japan's growth thrust is expected to boost Southeast Asian nations as increased demand in the world's No 3 economy spurs orders and Japanese companies take advantage of cheap funding for making investments in the region.

Indonesia, Thailand and Malaysia are identified by HSBC Holdings Plc and Credit Suisse Group AG to be among the biggest beneficiaries of Japanese monetary easing and a 10.3- trillion yen ($115 billion) stimulus plan by prime minister Shinzo Abe, whose tour of Southeast Asia ended on 18 January.

South Korea, though might suffer with a weakening yen making its rival's automotive and electronics exports more competitive, according to Credit Suisse and Australia & New Zealand Banking Group Ltd.

The wave of cheap funds would drive Japanese companies and banks to up investments and expand in Southeast Asia according to Frederic Neumann, co-head of Asian economics research at HSBC in Hong Kong.

He added in an interview that this would spur asset prices, investment, consumption and could single handedly help these economies sustain high growth levels in 2013.

Prime Minister Abe is pushing the central bank to bolster an economy that has seen three recessions in five years as he seeks to spur the economy of a nation whose investments helped spur Southeast Asia's boom in the early 1990s.

Meanwhile, Asian stock markets were mixed today amid uncertainty over the outcome of a central bank meeting in Japan and nervousness over whether US political leaders would be able to reach a deal on them debt limit of the government.

Congress would need to raise the limit on how much debt the US could have by the end of February as the country risked default and could be slapped with damaging credit downgrades.

Even if the ceiling was raised, it would likely be at the cost of deep spending cuts demanded by Republicans in Washington.

According to a report by analysts at Credit Agricole CIB in Hong Kong, markets remained optimistic, mainly due to failure in forging a deal ending in a disaster. "However, the more time that passes the more nervous markets should become", the report pointed out.

Among stocks in decline were Japanese export shares, which were up in recent sessions as the yen slid against other major currencies. Suzuki Motor Corp retreated 1.8 per cent, while Mitsubishi Motors Corp shed 3.2 per cent.

The National Australia Bank was up 1.8 per cent as speculation mounted that Spanish banking giant Santander was considering a bid for its UK business.