Nikkei closes at four-week low

Japan’s Nikkei stock average fell for the sixth straight day and closed at a four-week low on Monday, hurt by a strong yen and worries about a possible United States fiscal crisis that may push the world’s largest economy into recession.

Data showing Japan’s economy had shrunk 0.9 per cent in the three months to September – its first contraction in three quarters – further dulled investors’ appetite for risk, as it highlighted how slowing global growth and tensions with China are nudging the world’s third-largest economy into recession.

Reuters reported that the Nikkei fell 0.9 per cent to 8,676.44, and the broader Topix dropped 1.1 per cent to 722.58.

Investors are concerned about the ability of the administration of US President Barack Obama to strike a compromise with Congress over cutting the fiscal deficit, otherwise $600bn worth of tax hikes and spending cuts will kick in early next year.

Exporters, which will be hurt most if the United States slips into recession, took a beating. Toyota Motor Corporation, Honda Motor Company, Canon Incorporated and Nikon Corporation were down between 1.2 and 1.8 per cent.