Japan Shares Retreat as Yen Gains Amid Shutdown Concerns

Japanese shares fell, with the Topix (TPX) index headed for its biggest drop in a month, after the yen gained against the dollar amid concern the U.S. government is set for a partial shutdown.

Toyota Motor Corp., Asia’s biggest carmaker, lost 1.9 percent. Mizuho Financial Group Inc., Japan’s third-biggest bank by market value, sank 2.7 percent after being penalized for transactions with “anti-social” groups. Nippon Yusen K.K., Japan’s No. 1 shipping line, dropped 3.1 percent after the Baltic Dry Index, a measure of commodity shipping rates, dropped the most in 10 months. Industrial-plant operator Chiyoda Corp. jumped 2.2 percent after a report it plans to build the world’s first large-scale plant to produce hydrogen for fuel-cell cars.

The Topix lost 1.7 percent to 1,196.42 as of 9:23 a.m. in Tokyo, heading for its biggest decline since Aug. 28. All 33 industry groups fell. The Nikkei 225 Stock Average sank 1.9 percent to 14,481.57, with just eight companies rising. The yen touched a one-month high to the greenback.

“The budget and debt-ceiling impasse has descended into political posturing,” said Toshiyuki Kanayama, a senior market analyst at Monex Securities Inc. “They need to strike some kind of agreement, but you just don’t know how it’s going to play out. Investors are concerned a U.S. government shutdown may hurt the economy, so they’re becoming more risk averse.”

Futures on the Standard & Poor’s 500 Index dropped 0.8 percent. The gauge lost 0.4 percent on Sept. 27. The House of Representatives voted 231-192 yesterday to stop many of the Affordable Care Act’s central provisions for one year, tying it to an extension of U.S. government funding through Dec. 15. Should the Senate reject the bill today the government could be partially shut down from tomorrow.

To contact the reporters on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net; Satoshi Kawano in Tokyo at skawano1@bloomberg.net

To contact the editor responsible for this story: Sarah McDonald at smcdonald23@bloomberg.net

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