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Sharone Tobias and Will Piekos look at the top five stories in Asia this week.
1. Japan gets aggressive on deflation. The Bank of Japan surprised investors Thursday by unveiling aggressive easy-money policies to stimulate the Japanese economy, under newly installed central bank chief Haruhiko Kuroda. This is a huge change for the historically conservative bank, which will double its holdings of government bonds—a program 60 percent larger than the Federal Reserve’s QE4 bond-buying program, relative to GDP. The plan, dubbed “Abenomics” after Prime Minister Shinzo Abe, is Japan’s toughest attempt yet to combat deflation and a high yen, potentially stimulating Japanese exports. In response, the Nikkei 225 Stock Average surged 4.7 percent to its highest level since August 2008, and the yen hit a three-and-a-half year low of 97.21 against the dollar on Friday.
2. North Korea…again: The hits just keep on coming. Early this week, Pyongyang announced that it would restart its plutonium reactor and increase production of nuclear weapons material. Meanwhile, North Korea and the United States have continued shifting military assets on the Peninsula in anticipation of a conflict. On Friday, North Korea issued a warning to foreign embassies in Pyongyang saying that it cannot guarantee the safety of embassy staff after April 10. The rising tensions have taken their toll on South Korea, with foreign investors talking about moving production elsewhere; South Korean stocks fell 1.64 percent on Friday.
3. Bird flu returns. Chinese authorities confirmed the death of a sixth person with the avian-borne virus H7N9 today. The government slaughtered 20,000 birds in Shanghai in response to the discovery of pigeons infected with H7N9. As of now there is no evidence of human-to-human transmission; so far, there have been fourteen reported cases of the virus, all of which have occurred in eastern China. The Wall Street Journal’s China Real Time Report has a great collection of photos of China’s bird flu battle.
4. Continued fighting in Myanmar. Dozens are dead in Myanmar as violence between Muslims and Buddhists has increased steadily over the past two weeks. Ethnic minorities in Kachin and other areas plagued with violence represent one-third of the Burmese population and live mainly in resource-rich borderlands. Former U.S. President Jimmy Carter expressed concern over the violence today, fearing that the country’s historic opening last year is in jeopardy.
5. Malaysia dissolves its Parliament. Malaysian Prime Minister Najib Razak announced on Wednesday that he is dissolving parliament ahead of an upcoming general election. This move could lead to an unprecedented win by the opposition in a country where the National Front coalition has been in power for 56 years. The upcoming election, to be held on April 27, is expected to be the closest ever amid concerns over corruption.