Where the Trouble Lies

JAPAN
The economy is on the verge of recession. Depressed export markets in Asia will hammer corporate earnings. And no one knows whether big infusions of public money and tax cuts will bring an end to the banking crisis and rekindle domestic demand. Stock-pickers are sticking to proven multinationals with deep pockets and a global reach, including Sony and Canon.

SOUTH KOREA
Only for the fearless. Even a $60 billion International Monetary Fund bailout and austerity plan may not be enough to halt the free-falling won and stock market, and a new government may even try to renegotiate the IMF deal.

THAILAND
The new government is taking harsh measures to shut down troubled finance companies, but even tougher moves lie ahead despite an economic slump. Investors are seeking refuge in a few cash-rich companies.

HONG KONG
Concern No.1 is what China will do with its currency. If the Chinese economy flags, Beijing may devalue the renminbi to spur exports and growth. That would undermine the Hong Kong dollar and stock market. A rate rise by the Federal Reserve in the U.S. could hurt, too, by pushing local interest rates up in sympathy.