Tonic for the Tigers

Greenspanís rate cut sparks market rallies across Asia. Will its central banks adopt the Fedís prescription?

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Alan Greenspanís surprise cash injection Thursday was aimed primarily at U.S. banks, but it worked like an instant elixir on the Fed chairmanís secondary patient: Asia. Markets in Hong Kong, Tokyo, Singapore and just about everywhere else in the region surged mightily on a falling U.S. dollar. Investors hope that Greenspanís prescription for the encroaching U.S. slowdown -- increased liquidity -Ė would catch on in the places that need an economic jump start even more desperately than the U.S. does.

"The rest of the world loves the rate cut because it should strengthen their own currencies against the dollar, making their currency debts cheaper to service," says TIME Wall Street columnist Daniel Kadlec. "The dollar usually follows interest rates down, and that takes the pressure off Asian central banks." In that spirit, analysts expect Hong Kong's banks to respond Friday to the Fedís quarter point with a rate cut of their own, perhaps as much as a half point. Other central banks may soon follow suit. That translates to cheaper money -Ė and the resultant economic stimulation -- for the regionís economies. But itíll take more than that to save Asia. Japanís Nikkei gains, though solid, lagged behind its neighbor indexes at a more modest 2 percent, compared to the Hang Sengís 7 percent. The reason: Until hoped-for bank-bailout legislation kicks in, thereís just no money to lend, no matter how cheap it is.