What’s Behind Shift in Global Markets: The tectonic plates of the world economy are shifting, raising the question of whether markets are experiencing a bumpy return to a new normal or new period of volatility

Updated June 11, 2013, 7:41 p.m. ET

Global Tumult Grips Markets

Question for Investors: Bumpy Return to Normal or New Volatility as Central Banks Step Back?

By DAVID WESSEL

The tectonic plates of the world economy are shifting, moving the yield on the 10-year Treasury to the highest level in more than a year and shaking financial markets from Tokyo to Mumbai and Johannesburg to São Paulo. For the past few years, the global economy, struggling to recover from a financial crisis, has relied on a few constants: The U.S. would print plenty of money and keep interest rates very low. China would provide a lot of demand and vacuum up commodities from around the world. And Japan was largely irrelevant. Suddenly, all three of those are being questioned in markets, triggering paroxysms in stocks, bonds, commodities and—particularly, in the past couple days—the currencies of emerging markets. The big questions hanging over markets and the global economy now: Is this is the inevitably bumpy beginning of a welcome return to normal—a world in which the U.S. economy doesn’t need big and repeated doses of monetary stimulus, Japan grows again and China’s economy gently slows to a sustainable speed? Or is it a harbinger of more volatility in financial markets—perhaps the result of a misreading of the Federal Reserve’s policy intentions by the markets or a premature move by the Fed to cut back on easy money—that yields an unwelcome increase in market interest rates before the U.S. economy achieves what Fed Chairman Ben Bernanke once called “escape velocity”? Read more of this post

Export slowdown threatens emerging Asia’s credit-fuelled boom

Export slowdown threatens emerging Asia’s credit-fuelled boom

6:20am EDT

By Stuart Grudgings

KUALA LUMPUR (Reuters) – A deepening slump in exports is sending tremors through Asia, threatening to undermine some booming emerging economies that have surged ahead in recent years on a heady combination of easy credit, buoyant consumer demand and strong domestic investment.

Export growth throughout Asia has sagged in recent months, hit by slackening demand from the United States, Europe and China and by slumping commodity prices. Leading indicators are also pointing to weaker factory activity in the coming months.

The slowdown is being felt most keenly by Southeast Asian countries whose strong domestic economies are sucking in imports more rapidly and which now face sharp deteriorations in their trade balances that could spook investors. Read more of this post

Japan grapples with lack of entrepreneurs; “Too few companies get started and too many unprofitable companies are staying in business. We need to increase Japan’s metabolism.”

June 12, 2013 5:43 am

Japan grapples with lack of entrepreneurs

By Ben McLannahan in Tokyo

All Hiromi Yamaguchi wanted to do was to sell coffee to pinball addicts. But to get his business up and running he had to convince the health ministry that pushing carts around pachinko parlours would not violate hygiene laws. The former Daiwa Securities employee then spent more than a year persuading a prefectural police chief that serving hot drinks from a trolley was not a gateway to hard liquor and mob violence. Only then could Mr Yamaguchi build a business that has morphed into JP-Holdings, Japan’s largest private provider of childcare centres and a stock market darling. “I was told I was very persistent,” chuckles Mr Yamaguchi, 52, now president. Read more of this post

China Plans Soil Survey to Map Pollution Levels Across the Country After Toxic Cadmium Rice Scare

June 12, 2013, 1:02 p.m. ET

China Plans Soil Survey After Rice Scare

By BRIAN SPEGELE

BEIJING—China said it will conduct nationwide sampling of soil in order to map pollution levels across the country following recent revelations that portions of the country’s rice supply were tainted with the toxic metal cadmium.

The official Xinhua news agency, citing China’s Ministry of Land and Resources, said late Wednesday that the government would conduct the survey, though it wasn’t clear when or whether results would be released to the public. Read more of this post