Japan's Nikkei average edged down 0.7 per cent to a one-week closing low today as high-tech exporters were hit by a stronger yen and fears a US automaker bailout might not go through.
Increasing gloom about a deepening global recession sent trading houses such as Mitsubishi and other economy-sensitive shares tumbling on worry about reduced demand.
Banks became another casualty after a report that Sumitomo Mitsui Financial Group will raise about $4.1 billion in capital, becoming the latest bank to bolster its capital amid the financial crisis.
The Nikkei fell 55.19 points to 8,273.22, its lowest close in a week. At one stage it slid to its lowest point since October 29th, one day after it plunged to a 26-year low.
Market players said the day's low of 8,115.71 could bode ill since this was the same level hit on October 10th, just before the market began to plunge, and there was talk that recent buying by public pension funds - seen as a support the past few trading days - was on the wane.
"There's a lot of worry about the possible bailout of the Big Three carmakers in the US, since it doesn't seem to be coming together well at all, and this is keeping investors from buying," said Katsuhiko Kodama, a senior strategist at Toyo Securities.
"Failure to pull this together would set US stocks falling, have a knock-on impact on other carmakers, and worsen employment, so the impact would be quite severe."
A proposed $25 billion bailout of US automakers failed to gain traction yesterday in the Senate despite pleas from the industry that failure to act could result in wholesale liquidation and have a catastrophic effect on the world's largest economy.
Reuters