Governments under pressure to turn off the stimulus tap and raise interest rates

ON ASIA

Thanks to encouraging Japanese economic data, better-than-expected corporate results and hopes the global recovery would be sustained, Asia has got off to a good start in 2010, delivering more than 11% in local currency terms.

This quarter’s gains, the fourth positive quarter in succession, makes the lows of 12 months ago feel like another lifetime. The pace and strength of the recovery has also provided investors with a valuable insight into the resilience of the Asian economies. In Asia, there is a sense a more meaningful recovery is under way than compared with the rest of the world, although like elsewhere much of that has been the result of government expenditure. Although the region is integrated with the global economy, its vulnerability is less than many believed in 2008. While those sectors heavily...