Market Report - Asia Stocks Rise But Economies Weaken

ZHANG:
Asia stocks gained on Thursday, despite fresh signs of inflation and slowing economic growth across the region.

A recent fall in oil prices helped soothe investor worries about soon to be announced corporate earnings.

Many Japanese companies will start reporting results later this month with demand for products losing steam in overseas markets.

Korea has already begun its latest earnings season. Flat panel maker LG Display reported a surge in recent profits. But executives warned that upcoming quarters look bleak thanks to weak consumer confidence in key markets such as the United States.

In other news, China showed slower-than-expected export growth in June, and Chinese authories may be feeling pressure to stop letting the yuan strengthen against the dollar. Recently, authorities had been allowing the yuan to strengthen to help cool China's inflation.

But it's a double-edged sword, because a stronger yuan hurts Chinese exporters. Exporters rely on a weak yuan to stay competitive in the international market. A policy that hurts exporters could cause job loss and further economic slowdown in China.

China's trade surplus has already dropped more than 20 percent from a year ago. The drop reflects less trade with the U.S. and Europe, due partly to China's strengthening currency.

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