Asian stock markets have fallen in value today (January 27th), with investors increasingly concerned about the impact of money easing policies in the US.
Investors are growing worried that emerging markets could see their growth damaged as a result of the US becoming more relaxed about its monetary policy as it continues its recovery from the recession.
Stock indexes in Japan, Hong Kong and South Korea were all down, with the Nikkei slipping back by 2.1 per cent, while the Hang Seng fell by two per cent and the Kospi dropped 1.3 per cent.
"Everyone was reminded about last May's turmoil when investors unwound their positions in emerging markets on worries about [the] Fed's tapering," said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo.
Currencies and stocks could both be affected if the US continues to scale back its quantitative easing scheme in the coming weeks and months. The intentions of the new chair of the US Federal Reserve Janet Yellen, who replaced Ben Bernanke as the head of the organisation, are yet to be made clear. Ms Yellen was backed by US president as she targeted the role.
The peso in Argentina is among the currencies to have been hurt in recent weeks, with it dropping 11 per cent in the course of one day last week and experiencing its largest daily fall in over a decade when compared to the US dollar.
Investors have also been keeping a close eye on the Turkish lira, which has fallen down to an all-time low in recent weeks as the country's economy goes through a sticky period of recovery from the global financial crash.
Falling stock markets in Asia and weakening currencies in emerging markets around the world could see investors turn back to gold, which lost over 30 per cent of its value over the course of 2013 but has bounced back since the turn of the year.
Financial spreadbetters predicted the drop in Asian stocks would be replicated across Europe, with forecasts laid out that Britain's FTSE 100 would open down as much as 1.3 per cent.
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