Investing.com - Asian stock markets outside Japan were broadly higher on Wednesday, shrugging off concerns a partial shutdown of the U.S. government will create a drag on fourth quarter U.S. economic growth.
However, shares in Tokyo traded sharply lower as investors reacted to Prime Minister Shinzo Abe’s sales-tax increase and stimulus plan announced on Tuesday.
During late Asian trade, Hong Kong's Hang Seng Index was up 1%, Australia’s ASX/200 Index ended 0.17% higher, while Japan’s Nikkei 225 Index closed down 2.17%.
The U.S. government began a partial shutdown after lawmakers failed to reach an agreement on a new budget before Monday's midnight deadline. Republicans have insisted on delaying the implementation of President Obama's health care reforms as a condition for passing the budget.
A partial shutdown of U.S. federal government operations was expected to delay economic data releases this week, including Friday's highly-anticipated non-farm payrolls report.
According to an Obama administration official, the Labor Department will postpone the release of its monthly employment report if the federal government remains closed.
In Tokyo, the Nikkei tumbled to a three-week low after Japanese Prime Minister Shinzo Abe announced plans to raise the sales tax to 8% from 5%, starting in April.
Abe unveiled a JPY5 trillion stimulus package designed to offset an increase in the sales tax. The measures will include spending on public works and tax breaks to encourage companies to boost capital expenditures and wages.
USD/JPY fell to hit a session low of 97.61, moving off the previous session’s high of 98.71. A stronger yen reduces the value of overseas income at Japanese companies when repatriated, dampening the outlook for export earnings.
Automakers Mazda and Honda saw shares drop 3% and 1.45% respectively, while Sony and Sharp fell 1.25% and 2.8%.
Japanese megabanks were also lower with shares of the nation’s largest lender Mitsubishi UFJ Financial Group shedding 1.45%, while Sumitomo Mitsui Financial Group and Mizuho Financial Group declined 1.4% and 1.9% respectively.
Index heavyweight Fast Retailing saw shares tumble 4.2%.
Meanwhile, in Australia, the ASX/200 Index edged higher as investors shrugged off concerns over a partial shutdown of the U.S. government.
The big four banks were mostly higher, with National Australia Bank shares adding 0.3%, while Commonwealth Banking Group and ANZ Banking Group inched up 0.45% and 0.2% respectively.
On the downside, gold miners Newcrest Mining and Kingsgate Consolidated saw shares plunge 3.95% and 3.8% respectively, after gold prices fell nearly 3% on Tuesday.
Elsewhere, in Hong Kong, the Hang Seng rallied 1% after remaining closed on Tuesday due to the National Day holiday. Markets in mainland China will be closed until October 7 for the Golden Week holiday.
Government data released Tuesday showed that China’s official manufacturing purchasing managers' index inched up to 51.1 in September from 51.0 in August, missing forecasts for 51.5.
The disappointing data indicated that the recovery in the world’s second largest economy remains fragile.
Gold producers Zijin Mining Group and Zhaojin Mining Industry lost 3.2% and 3% respectively, while Jiangxi Copper Company dropped 1.7%.
Looking ahead, European stock market futures pointed to a modestly lower open, as investors looked ahead to the outcome of the European Central Bank’s latest policy meeting and press conference with President Mario Draghi later in the day.
The EURO STOXX 50 futures pointed to a loss of 0.25% at the open, France’s CAC 40 futures shed 0.3%, London’s FTSE 100 futures indicated a decline of 0.25%, while Germany's DAX futures pointed to a drop of 0.35% at the open.
In Italy, Prime Minister Enrico Letta was due before parliament for a vote of confidence later Wednesday, after Silvio Berlusconi pulled his ministers out of the coalition government on Saturday.
However, shares in Tokyo traded sharply lower as investors reacted to Prime Minister Shinzo Abe’s sales-tax increase and stimulus plan announced on Tuesday.
During late Asian trade, Hong Kong's Hang Seng Index was up 1%, Australia’s ASX/200 Index ended 0.17% higher, while Japan’s Nikkei 225 Index closed down 2.17%.
The U.S. government began a partial shutdown after lawmakers failed to reach an agreement on a new budget before Monday's midnight deadline. Republicans have insisted on delaying the implementation of President Obama's health care reforms as a condition for passing the budget.
A partial shutdown of U.S. federal government operations was expected to delay economic data releases this week, including Friday's highly-anticipated non-farm payrolls report.
According to an Obama administration official, the Labor Department will postpone the release of its monthly employment report if the federal government remains closed.
In Tokyo, the Nikkei tumbled to a three-week low after Japanese Prime Minister Shinzo Abe announced plans to raise the sales tax to 8% from 5%, starting in April.
Abe unveiled a JPY5 trillion stimulus package designed to offset an increase in the sales tax. The measures will include spending on public works and tax breaks to encourage companies to boost capital expenditures and wages.
USD/JPY fell to hit a session low of 97.61, moving off the previous session’s high of 98.71. A stronger yen reduces the value of overseas income at Japanese companies when repatriated, dampening the outlook for export earnings.
Automakers Mazda and Honda saw shares drop 3% and 1.45% respectively, while Sony and Sharp fell 1.25% and 2.8%.
Japanese megabanks were also lower with shares of the nation’s largest lender Mitsubishi UFJ Financial Group shedding 1.45%, while Sumitomo Mitsui Financial Group and Mizuho Financial Group declined 1.4% and 1.9% respectively.
Index heavyweight Fast Retailing saw shares tumble 4.2%.
Meanwhile, in Australia, the ASX/200 Index edged higher as investors shrugged off concerns over a partial shutdown of the U.S. government.
The big four banks were mostly higher, with National Australia Bank shares adding 0.3%, while Commonwealth Banking Group and ANZ Banking Group inched up 0.45% and 0.2% respectively.
On the downside, gold miners Newcrest Mining and Kingsgate Consolidated saw shares plunge 3.95% and 3.8% respectively, after gold prices fell nearly 3% on Tuesday.
Elsewhere, in Hong Kong, the Hang Seng rallied 1% after remaining closed on Tuesday due to the National Day holiday. Markets in mainland China will be closed until October 7 for the Golden Week holiday.
Government data released Tuesday showed that China’s official manufacturing purchasing managers' index inched up to 51.1 in September from 51.0 in August, missing forecasts for 51.5.
The disappointing data indicated that the recovery in the world’s second largest economy remains fragile.
Gold producers Zijin Mining Group and Zhaojin Mining Industry lost 3.2% and 3% respectively, while Jiangxi Copper Company dropped 1.7%.
Looking ahead, European stock market futures pointed to a modestly lower open, as investors looked ahead to the outcome of the European Central Bank’s latest policy meeting and press conference with President Mario Draghi later in the day.
The EURO STOXX 50 futures pointed to a loss of 0.25% at the open, France’s CAC 40 futures shed 0.3%, London’s FTSE 100 futures indicated a decline of 0.25%, while Germany's DAX futures pointed to a drop of 0.35% at the open.
In Italy, Prime Minister Enrico Letta was due before parliament for a vote of confidence later Wednesday, after Silvio Berlusconi pulled his ministers out of the coalition government on Saturday.