By Mia Lamar
Japanese shares fell sharply Monday, leading losses across Asia
as a possible government shutdown in the U.S. loomed large.
U.S. budget talks hit an impasse over the weekend as lawmakers
wrangled over funding for President Obama's signature health law.
Congress must pass a budget before Tuesday to avoid a partial
shutdown of the federal government.
A sharp strengthening of the yen also weighed on Japanese
stocks. The Nikkei Stock Average traded down 2%, falling as low as
14,451.88 in early trade. The U.S. dollar (USDJPY) changed hands at
97.81 yen, compared with Yen98.27 late Friday in New York.
"Things are far from the 'panic stage', but they don't have to
be for investors to be spooked by the apparent intractability of
the U.S. political deadlock," said Tachibana Securities market
analyst Kenichi Hirano.
A reading on the nation's industrial production last month
weighed on sentiment. Data Monday showed Japan's industrial output
fell 0.7% in August from the previous month, worse than
expectations for a 0.4% drop. The decline was attributed to a
slowdown in exports and consumer spending.
In Sydney, the benchmark S&P/ASX 200 fell 1%, more than
shedding last week's gains when the index hit levels not seen since
before the global financial crisis.
Heavyweight mining stocks traded lower. BHP Billiton fell 1.1% and Rio Tinto shed 1.5%.
Stocks in Korea also slumped, sending the benchmark Kospi
Composite down 0.7%.
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