FX.co ★ Fundamental Analysis, January 11, 2011

Asia's stock markets have recorded moderate index rises his morning, with China's Shanghai index ascending by 0.4%, Hong Kong's Hang Seng trading at a 1% rise, South Korea's KRX strengthening by 0.1%, and Japan's Nikkei 225 continuing to trade in negative territory, dropping by 0.3% of its value.

Japan's Minister of Finance, Yoshihiko Noda, has announced yesterday that his government will join China in supporting Europe by purchasing the debt of problematic nations like Portugal, Spain, and Italy. Japan, he said, will purchase about 20% of the Special European Fund that has been founded to rescue nations from the EU's debt crisis.

The President of Portugal, Anibal Cavaco Silva, denied reports that the country is under pressure to accept international aid to avoid the spreading of its debt crisis, due to rumors that Germany and France trying to pressure the country into accepting an aid package of 50-100 billion Euro. The President added that the country does not intend to ask the IMF for aid, nor is it under any pressure to accept such aid.

On the background of these reports, the European stock markets have locked on a negative trend for the second day running, erasing about half the gains recorded last week yesterday. As such, the London stock exchange locked at a decline of 0.5%, the Frankfurt exchange retreated by 1.3%, the Paris exchange declined by 1.7%, whereas the Lisbon exchange dropped by 2.7% due to the strengthening of the estimates that Portugal will be forced to ask for a European aid package.