The financial crisis in Asia, which began with increasing market pressure on the Thai baht in the first half of 1997, continued to unfold during 1998/99, with the persistence of market turmoil and the depth of the recessions in the affected Asian countries exceeding initial expectations. Political instability, policy reversals, and related social and economic disturbances in Indonesia in May 1998 hindered progress there. At the same time, the further weakening of the Japanese economy had a large negative impact on demand in the region and on international financial market sentiment.