Although Asia will not be immune from the continuing crisis in the euro-zone and weak global demand, healthy fundamentals and plenty of scope for policy easing mean growth should hold up relatively well over the next couple of years. Nevertheless, the risks are skewed to the downside. A sudden and rapid deterioration of the global economy would hit Asia hard. We expect Asian currencies and equity markets to finish 2013 lower than where they are now. Government bond yields are likely to remain at historically-low levels.
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