The Coming Week in Asia: Surviving in a Post-Rate-Hike Market

TOKYO -- As summer holidays draw to a close here and investors stampede back into the arena, the big question facing them this coming week will be how to play the Bank of Japan's rate hike.

First, they'll have to decide if the 25 basis-point hike was the start of a tightening cycle or a blow struck in the name of the central bank's independence, and thus a one-off occurrence. (A basis point is 1/100th of a percentage point.) Most market watchers believe the latter prompted the Aug. 11 rate increase, the first in nearly a decade.

With deflation still present in the economy -- consumer prices fell 0.7% in the year to June -- a round of continued hikes would not seem to make sense. Additionally, the rate hike will have sent a signal that the BOJ wants Japan Inc. to speed up the pace of corporate reform, but further hikes could derail that process by pushing too many companies into bankruptcy. ...