Asian stocks fall on Washington shutdown worries
TOKYO (AP) — Asian stocks were mostly down Monday, led by a plunge on the region's main bourse in Tokyo, as jittery investors watched the U.S. government near a shutdown.
Tokyo players were also awaiting a decision expected Tuesday, by the Japanese government on raising the consumption tax, said Katsuyuki Hasegawa, chief market economist at Mizuho Research Institute in Tokyo.
The weakening dollar, reversing course from its recent gradual gain, also didn't help. A weak dollar reduces the value of the overseas earnings of Japan Inc.'s giant exporters such as Toyota Motor Corp. and Nintendo Co.
The benchmark Nikkei for the Tokyo Stock Exchange lost 2.06 percent to close at 14,455.80. South Korea's Kospi fell 0.7 percent to 1,996.96, while the Hang Seng index shed 1.2 percent to 22,922.30.
Hasegawa said the Nikkei would likely be hurt if Washington shuts down and sets off a plunge on Wall Street.
But he said a tax rise in Japan, which usually is negative for stocks, could prove a plus by signifying Prime Minister Shinzo Abe's determination to forge ahead with structural reforms.
"And so now the Tokyo markets are quiet and a wait-and-see attitude is prevailing," said Hasegawa.
U.S. stocks ended with a decline last week, falling Friday for the sixth day out of the last seven as nervous investors fretted about whether the U.S. government could shut down unless Congress agrees to a new spending bill.
The Dow Jones industrial average fell 0.5 percent to close at 15,258.24. The Standard & Poor's 500 index fell 0.4 percent, to 1,691.75. The Nasdaq composite was down nearly 0.2 percent, at 3,781.59.
Adding to the indecisiveness are mixed signals about the American economy. A government report last week showed incomes and consumer spending grew only slightly last month, raising questions about a recovery.
"Investors are so disappointed, actually this solution with America, especially American politicians engaged in useless and pointless political gesturing, instead of trying to solve the economy problems facing them," said Francis Lun, chief economist of GE Oriental Financial Group in Hong Kong.
A weakening dollar, which reduces the value of Japanese exporters' revenue, also helped send the Nikkei downward.
In currencies, the dollar was trading at 97.92 yen, down from 98.31 yen late Friday. The euro fell to $1.3492 from $1.3543.
Benchmark oil for November delivery fell $1.32 to $101.56 in electronic trading on the New York Mercantile Exchange. The contract fell 16 cents to close at $102.87 a barrel on the Nymex on Friday.
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