Japan PM Hashimoto announces resignation
TOKYO, July 13 (Reuters) - Japanese Prime Minister Ryutaro Hashimoto on Monday announced his intention to resign, a day after his ruling party suffered a devastating electoral setback in a vote seen as rejecting his economic policies.
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Monday July 13, 2:08 am Eastern Time
Asia markets slide on Japan election results
..."The election debacle places in doubt the future of a pair of key policy initiatives -- a bridge bank scheme to help the economy work off at least 77 trillion yen ($542 billion) in debt and proposed permanent income tax cuts -- seen as necessary to wresting the country from its economic malaise.
Japan's benchmark Nikkei average rebounded from a nearly two percent decline amid hopes the voters' rage would prompt politicians to take dramatic action to rescue the world's second-largest economy.
''The outcome presses home to the LDP that they've got to do more and do it more quickly,'' said Coen Kluyver, manager of foreign institutional equity sales at ING Baring Securities.
By the close, the benchmark Nikkei average recouped its earlier losses and ended up 270.33 points, or 1.68 percent, at 16,360.39.
The rest of the region, however, was not as confident.
Hong Kong's Hang Seng index fell below the 8,000-point level for the first time since mid-June with all eyes glued on the situation in Japan.
''People are watching the Japanese yen and the Japanese stock market closely,'' said Antony Mak, sales director at Vickers Ballas. ''I expect to see the index testing the downside at about 7,300 points.''
The Hang Seng was down 215.02 points, or 2.62 percent, at 7,990.75.
Singapore shares were also hit hard. The benchmark Straits Times Industrials Index was off about 38 points, or 3.5 percent, at 1,052.57 in early afternoon trade.
''Despite expectations of glitches in the election, there were also hopes Hashimoto might just pull through,'' said a dealer at a Singapore brokerage. ''Now the reality of the news is not going down too well with the financial markets.''
In neighbouring Malaysia, the KLSE index was down 4.17 points, or 0.97 percent, at 424.45.
South Korean stocks fell amid worries a weaker yen -- the yen was dragged down on the election results -- would make it harder for the country's big blue chips to export against Japanese companies.
The Seoul exchange's main index was down 1.8 points, or 0.59 percent, at 303.17 by the midday close.
Taiwanese shares gave up 67.63 points, or 0.86 percent, to close at 7,815.53.
Thai stocks were down 6.58 points, or 2.40 percent, at 267.68 at midday. Banks and finance companies, many of which have borrowed heavily from Japan, led the decline amid expectations they would announce poor second-quarter results.
In the Philippines, the PHS Composite fell 26.36 points, or 1.46 percent, 1,775.85.
''That's a setback for the region as a whole... Now that Hashimoto's government has to go, you're back to square one in terms of Japanese reforms,'' said Saturnino Mejia, research head of Guoco Securities Phils Inc.
Indonesian shares fell 5.369 points, or 1.16 percent, to 458.212"
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Let's see how the Nikkeii does after the US markets slide tomorrow, if they do. *crossing my fingers for luck* |
