Nikkei Declines 1% as Asian Markets Ease

Hiruki Nakamura
04 Oct, 2013
New York City

Stocks in Tokyo edged lower and investors shifted focus to domestic issues. U.S. government remained shut for the third day and debt default date approaches in two weeks. The yen weakened and commodities prices rose.

[R]4:45 PM Tokyo – Stocks in Tokyo edged lower and investors shifted focus to domestic issues. U.S. government remained shut for the third day and debt default date approaches in two weeks. The yen weakened and commodities prices rose.[/R]

Market indexes in Japan and in Asia trended lower as investors shift focus to domestic developments and the U.S. debt default deadline approaches in two weeks.

The Nikkei 225 Average extended losses for the third day in a row and declined 1% to 14,011.73. The broader Topix index fell 1.2% to 1,160.70.

The yen weakened and closed at 97.13 against one U.S. dollar.

Investors have begun to factor in longer than expected U.S. budget impasse and world markets are increasingly worried as the debt default date approaches in less than two weeks.

U.S. government’s partial shutdown has so far not impacted the broader economy but as more days pass the closure is expected to impact consumer confidence and economic growth in the fourth quarter.

Last time the U.S. government was shutdown in 1997 for 28 days and the economic growth was broadly preserved.

But, since then the U.S. government debt has ballooned to $16.7 trillion from $5.4 trillion.

Stocks in Review

Export sensitive stocks declined for the third day in a row as the yen weakened.

Sony Corp declined 1.8% to 2,017, Cannon Inc decreased 0.3% to 3,105 and Hitachi, Ltd dropped 1.4% to 628 yen.

Toyota Motor Corp decreased 1.2% or 70 yen to 6,180 yen, Nissan Motor Co declined 0.9% to 969 yen and Honda Motor Co Ltd fell 0.7% 3,710 yen.