Japanese stocks led the way on Wednesday as the follow-through from Tuesday's Wall Street surge spilled into Asia.
The Nikkei 225 index, Japan's version of the Dow, had its best day since 2008, closing up 8.0% on Wednesday. The broad Topix, Japan's equivalent of the S&P 500, ran up 6.9%, and has now climbed 12.9% this week.
Although Tokyo has seen the biggest advances, trader's screens in Asia are a sea of green. Indian stocks are the other big gainers on a day of big gains, the Sensex up 6.0% in afternoon trade.
Investors in Asia's largest stock market are cheering the decision that Tokyo will still get its Olympic Games. The summer spectacular will certainly take place by next summer at the latest, according to the Japanese organizers and the International Olympic Committee.
I'd been hoping beyond hope that the IOC and Japan might hold off long enough to evaluate how the pandemic proceeds before calling their shots. They had given themselves a month to decide, but were rushed to do so in two days by sporting bodies keen to give their athletes some guidance.
Of course, the organizers may have actually only put off the Olympics until they get put off again. There's no guarantee they can be held as normal by the summer of 2021. They will still be called Tokyo 2020 even if held next year.
The Covid-19 outbreak in Asia does indicate a way forward for the rest of the world. Japan still has "only" 1,141 confirmed cases, and 45 deaths. Here in Hong Kong, and also in Singapore, the city states have managed to maintain a low case count despite a second wave of returnee cases caused by travel bans abroad.
What is the "lockdown endgame"? That's what T.S. Lombard analyst Constantine Fraser considers in an interesting report, noting that South Korea's experience may be instructive.
"For now, many countries seem to be facing a trade-off between two equally unsustainable options: galloping casualties and indefinite economic shutdown," Fraser wryly observes.
South Korea faced the first big wave outside China of infections, thanks to its close proximity to China, and with a religious sect spreading the disease. It already had 2,000 infections by the end of February. Yet it has successfully brought new cases to a head at the start of this month.
New infections in South Korea have fallen from 900 a few weeks ago to around 100 a day now. A situation that appeared to be rapidly getting out of control has been brought under control. Since the first week of March, Korea has "flattened the curve." Now it has "only" 9,137 cases, and 120 deaths. The vast majority of cases are in the city of Daegu, with another cluster in the capital, Seoul.
This has been achieved without the large-scale enforced quarantines set in place first in China and now in western Europe and the United States. The country has carried out 348,000 coronavirus tests, a huge number, and has been aggressive in contact tracing of those infected. The population has worn masks, engaged in social distancing, and stayed home as much as possible.
Restaurants remain open, but are empty. Factories, too, have not shut. Korean exports for the first 10 days in March are up 10% year on year. Lombard is projecting a 0.5% contraction in shipments for Q1, and a 0.4% rebound in Q2.
Stocks in export-driven Korea have risen 5.7% today, and 10.9% this week. They remain down 21.0% this year, just as Japanese shares have still lost 17.2% in 2020, judged by the Topix.
These Asian nations are the ones to watch to see if the Covid-19 virus can in fact be brought under control. The war is not won yet, but a battle has been settled.
China's figures are not to be trusted. Mainland officials admit they are not counting positive tests if that person does not show symptoms, or require hospitalization. Quite what a positive test means if it does not count as a positive case is best left to Chinese testers to explain.
Early in the outbreak there was a similar situation in China that anyone who has read Catch-22 might understand. You weren't counted as a Covid-19 case if you hadn't been tested positive. And you didn't need to be tested unless, of course, you have the virus. On your way.
While we still know remarkably little about the virus that originated in Wuhan, we do know that it is pretty infectious, and there are quite a few asymptomatic cases. A study led by Chinese doctors finds that 59% of coronavirus cases in Wuhan were very mild or showed no symptoms, and weren't reported to or by the authorities. The paper, which has not been peer reviewed, is explained in the South China Morning Post.
These "unascertained" cases may explain why Covid-19 has suddenly spread so far and wide. Now we are stuck, much like the organizers of the Olympics, with a series of unpalatable choices. Our course out of this is to pick the most-sensible one, one that is sure not to be perfect.
It's trendy right now to be moralistic, and say that sport hardly matters when people are dying. That's true, unless you're inside the sports industry, it does not really matter, and even then, not that much. We are, however, finding out what it means to be healthy and have a solid immune system - which regular exercise is proven to bolster - when a disease calls.
The coach of England's best club football team, Liverpool, perhaps said it best. Soccer is "the most important of the least important things," Jürgen Klopp told the team's fans, begging them to heed public-health advice. But sport does give us some rules and an escape for however long an event lasts, where it's clear how we win and lose, and how we should play the game, in a world where the rules have broken loose.
I am not alone in pondering what the social consequences to health and society of a recession likely to be one of the largest on record. China set records in a bad way for the first two months of this year, with its worst set of economic figures on record in terms of manufacturing slowdown, retail sales decline and a rising jobless rate. That pattern is likely to be replicated as other countries go into lockdown.
The U.S. economy will probably set its worst non-warfare economic performance in Q2. The worst so far came far back in Q1 1958, when the economy shrank 10%. Société Générale projects a loss of 14% in Q2 2020. To me, that figure is likely to get worse not better if current trends persist.
If and when Japan holds the Olympic Games, perhaps it will serve as a fitting tribute to a global crisis, a battle not won but contained.
Can the West follow Asia's suit?