A week after vowing to do whatever it takes to keep the euro common currency intact, ECB President Mario Draghi had only more promises and nothing concrete to announce. In the near term, attention is likely to turn to the monthly U.S. payrolls report due Friday which provides a closely watched but lagging indicator of how the world’s biggest economy is faring.
Japan’s Nikkei 225 stock average was down 1.2 percent at 8,553.68 and Hong Kong’s Hang Seng lost 0.9 percent to 19,504.98. Australia’s S&P/ASX 200 shed 1 percent to 4,227 and South Korea’s Kospi dropped 1.1 percent to 1,849.01. The Shanghai Composite rose 0.4 percent to 2,120.54.
Investors had hoped the ECB would resume purchases of government bonds to lower the borrowing costs of financially struggling countries such as Spain and announce other measures to calm a crisis that is dragging down global economic growth.
But Germany, which is Europe’s biggest economy, is opposed to the ECB operating outside its mandate to control inflation and wants any government bond purchases to be financed by other funds set up to deal with the crisis.
The problem with the German approach, some analysts say, is that Europe’s bailout funds lack the firepower to make much of a difference if the financial situation in a big economy such as Spain or Italy dramatically worsens.