Japan stocks open 0.93pc lower

TOKYO: Tokyo stocks opened 0.93 percent lower on Tuesday as investors grew cautious amid speculation that Japan might step into the market to stem the yen's strength.

The key Nikkei-225 index on the Tokyo Stock Exchange opened down 92.84 points at 9,872.17, despite the news that the US Congress had approved legislation to avoid a disastrous debt default and cut trillions in government spending.

Investors may take a wait-and-see attitude following a Nikkei newspaper report that the government is preparing an intervention into the currency markets, said Kazuhiro Takahashi, general manager at Daiwa Securities.

The dollar briefly fell to 76.29 yen in New York on Monday, just a shade away from its post-World War II low of 76.25 on March 17.

The dollar was trading at 77.33 yen in Tokyo morning on Tuesday.

Investors were also discouraged by drops in US stocks on weaker-than-expected US manufacturing data.

"We're starting to see more of the U.S. economic data that fall short of expectations, so it may take some time before we see significant improvement," Takahashi told Dow Jones Newswires.

On Monday the Dow Jones Industrial Average shed 10.75 points (0.09 percent) to close at 12,132.49.

Later on Monday, with barely a day to act, the polarised US House of Representatives approved a massive austerity plan to avert a debt default that would have wreaked havoc through the global economy.

Copyright AFP (Agence France-Presse), 2011