Asia Stocks Pare Gains After Washington Shutdown

Asian markets sold off modestly as the deadline for a U.S. government shutdown passed while the dollar declined slightly in trading in Asia.

The shutdown hit in the middle of Tuesday trading. Japan’s Nikkei Stock Average ,  earlier up more than 1.3% following an upbeat economic news, fell back from its peak, trading up 0.3% shortly after the shutdown Tuesday. Korean and Southeast Asian markets also remained higher.

In currency markets, the U.S. dollar  slipped back against the Japanese yen to ¥98.11 after earlier trading in the mid-98 range.

Traders said investors had largely positioned for the shutdown Monday as it became increasingly certain lawmakers would fail to agree on a budget before a Tuesday deadline. Stocks sold off across the region Monday.

Stocks in Australia  turned negative after earlier trading up 0.5% Tuesday.

Markets in Hong Kong and mainland China were closed for holidays Tuesday.

Traders said the impact of the shutdown was unclear.

“That’s why investors are holding off on their trading,” said Kosuke Hanao, Head of FX at HSBC in Japan. They were also looking beyond the shutdown and also considering the impact of the Federal Reserve’s decisions on monetary policy. “Once the Fed decides on tapering and lawmakers compromise to clear the debt ceiling problem, there will be some dollar buyers,” Hanao said.

Source : Marketwatch