Market Report - Oil Drop Boosts Optimism

ZHANG:
Oil prices continued to drop from record peaks on Thursday, boosting Asian investor confidence and the buying power of the U.S. dollar.

The fall came on the back of a recent 15 percent slide in crude prices, despite the peak summer travel season in North America.

The dollar's rise against Asian currencies makes exporters like Toyota more attractive.

Toyota also announced that its global sales rose in the first half of the year. Sales at U.S. rival General Motor's fell 3 percent--including a steep drop in North America.

Still, overall exports from Japan fell in June for the first time in nearly five years, as a weaker U.S. economy weighed on demand.

A morning earthquake that rattled northern Japan had some effect on industry in the area. Electronics makers Fujitsu and NEC halted production to check for damage to semiconductor factories.

Also on Thursday, China Construction Bank denied media reports that it has $7 billion in bonds issued by troubled U.S. mortgage lenders Fannie Mae and Freddie Mac.

Reports cited a research note from brokerage firm CLSA, which also stated that Bank of China may hold roughly $20 billion in bonds issued by Fannie and Freddie, and that mainland lenders overall may have more than $30 billion of exposure to the two firms.

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News & Politics

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