Makoto Noji

Considering that emerging economies, from the Indian rupee to the Chilean peso, have been a source of concern for the world economy, their recovery is positive for both emerging economies as well as risk assets as a whole, yet, there is no structural change in China's efforts to cut excessive investments... We should be wary of the possibility that the rally in risk assets driven by easing expectations of a Fed rate hike will run out of steam.

Monetary easing may be effective in prompting buy-back in 'oversold' risk assets but it is not enough to brighten the economic outlook, which market players are concerned about, when China is curtailing excessive investments, monetary stimulus would not boost China's demand much. Rather if it ends up weakening the yuan, it would fuel competition in devaluation. There's no wonder U.S. stocks have lost steam.