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Markets

Tokyo stocks close sharply lower on US debt worry

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TOKYO: Tokyo stocks closed sharply lower on Friday, tracking another hefty Wall Street sell-off on worries over a possible US debt default and signs that the global recovery is slowing.

The benchmark Nikkei 225 index closed down 2.31 percent or 681.59 points at 28,771.07 while the broader Topix index was down 2.16 percent or 43.85 points at 1,986.31.

"The issues of US government debt and worsening Chinese economic indicators are weighing on the market," said senior strategist Yoshihiro Ito of Okasan Online Securities.

Tokyo shares had already dipped in the previous session following China's weaker-than-expected manufacturing data, but investors are still digesting the negative impact, analysts said.

Before the opening bell in Tokyo, the US Congress approved a stopgap funding bill in a rare show of cross-party unity to avert a crippling government shutdown.

However, "there remains a risk of further confrontations as it is only a stopgap," Hideyuki Suzuki, head of SBI Securities' investment information department, told AFP.

In Tokyo, Nintendo -- which joined the Nikkei 225 index on Friday -- plunged 8.72 percent to 49,570 yen after a Hong Kong-based investment bank cut its assessment of the shares.

Telecom giant KDDI was down 1.73 percent at 3,627 yen after a US investment bank revised its assessment downwards.

Japan's unemployment rate in August stood at 2.8 percent, unchanged from the previous month, according to data released by the internal affairs ministry before the opening bell, which did not prompt a strong market reaction.

The dollar fetched 111.15 yen in Asian trade, against 111.24 yen in New York late Thursday.

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