TOKYO: Tokyo stocks fell 0.94 percent Friday on growing fears that the US government shutdown could lead to a devastating debt default and strike a huge blow to the global economy.
The benchmark Nikkei 225 index shed 132.94 points to 14,024.31, while the Topix index of all first-section shares was down 0.87 percent, or 10.17 points, at 1,163.82.
While the shutdown has fuelled jitters among investors, analysts have generally expressed even deeper concerns about the October 17 deadline to raise the US debt ceiling.
International Monetary Fund chief Christine Lagarde warned that a US failure to raise the borrowing limit could wreak havoc on the global economy, while the Treasury Department said a default could have a "catastrophic" effect.
On Wall Street the Dow ended 0.90 percent lower on Thursday.
"The deleterious effects of the US government shutdown are already being felt," SMBC Nikko Securities general manager of equities Hiroichi Nishi told Dow Jones Newswires.
"The deadlock looks as intractable as ever, and investors are continuing to pull funds out of the dollar and risk assets as a precaution," he said.
Japanese Finance Minister Taro Aso on Friday urged Washington to resolve the political crisis, warning it could seriously damage the global economy.
"My feeling is... the debt limit will have an internationally significant impact. Unless it is resolved swiftly, we will see various consequences," Aso told reporters in Tokyo.
Aso also said the situation was likely to stoke more buying of the safe-haven yen, pushing up the unit's value.
On Friday the dollar was at 97.08 yen, down from 97.27 yen in New York, where the greenback temporarily fell below the 97-yen mark on Thursday.
In Tokyo share trading, Toyota fell 1.12 percent to 6,180 yen while Sony lost 1.75 percent to 2,017 yen.
Tokyo Electric Power dropped 4.34 percent to 528 yen after Japan's atomic watchdog summoned its boss for a public dressing down over sloppy standards at its crippled Fukushima plant.
Mobile carrier SoftBank was down 3.45 percent at 7,270 yen on profit-taking after a 15 percent rally in the past week. (AFP)
