News / Asia

Asia Reacts With Caution, Surprise to US Government Shutdown

Capitol building in Washington D.C., Sept. 19, 2013.
Capitol building in Washington D.C., Sept. 19, 2013.
Asian markets saw a modest selloff of stocks and dollars in Tuesday trading upon the partial shutdown of the United States government. 
 
Market players say news of the first U.S. government shutdown in 17 years did trim early gains on the Tokyo stock exchange, but the benchmark Nikkei managed to close 29 points higher, a gain of a fifth of a percent. Markets in Hong Kong and on the Chinese mainland were closed for a holiday, and South Korea's KOSPI rose one tenth of a percent.
 
Masamichi Adachi, an economist at JP Morgan in Tokyo, said investors had already anticipated the U.S. government shutdown, and were more worried about a possible impending showdown over the raising of the debt ceiling.
 
“If it takes longer than say a couple weeks or something, that's definitely negative. And we are more concerned on the debt ceiling issue because that's potentially accompanied by the technical default of the U.S. treasuries. And that's a significant negative impact for the financial markets,” explained Adachi.
 
The U.S. Treasury Department has warned that the government will exhaust its authority to borrow money in October. Congress must pass measures to raise the debt ceiling before then.
 
The vice president of Trinity Securities in Bangkok, Nuttachart Mekmasin, expects limited ramifications in Asia, for now. 
 
“In the short term, there might be some outflow… In the past week foreigners net sold our stocks and also the other Asian countries stocks, but the market has withstood the pressure very well.”
 
Currency traders sent the U.S. dollar to a nine-month low in Asia as the yen benefitted from the uncertainty in Washington.
 
The news of the shutdown was covered extensively by domestic media throughout Asia on Tuesday.  
 
China's state-run Xinhua news agency, in explaining the ramifications of the shutdown to readers, cautioned tourists heading to America that popular destinations, such as national parks and monuments in Washington, D.C., might be closed.
 
There is also concern about the impact the shutdown could have on trade with the United States.
 
Professor Chen Qi, at the Carnegie-Tsinghua Center for Global Policy in Beijing, thinks China is unlikely to make this a political issue.
 
Chen opined that if this had happened in another country, it might be more problematic, but he trusts that the maturity of the U.S. government and American politicians will “have the wisdom to come to a consensus and solve this issue smoothly,” especially since they have been down this road numerous times previously.
 
In India, some business executives told VOA they could not understand how a country as developed country as the United States could see its government shutdown because of a legislative impasse.
 
Meher Rana, a first year student at Jesus and Mary College in New Delhi, called it “pretty sad and shocking” and fears a direct impact on her family.
 
“My father, he is an exporter and he has been working with North American and parts of South American [markets] for a really long time. And the economy is really going down, the government is shut, so it's going to affect him and we are all really shocked,” said Rana.
 
The partial shutdown of the U.S. government occurred after lawmakers failed to reach agreement by midnight on Monday regarding funding for the new fiscal year, which started October 1st.

William Gallo in Washington, Aru Pande in New Delhi and VOA Beijing also contributed to this report.

Steve Herman

A veteran journalist, Steve Herman is VOA's Southeast Asia Bureau Chief and Correspondent, based in Bangkok.

You May Like

Cambodia Seeks Official UN Maps for Vietnam Border

Notice of request comes as 2 countries open border talks Tuesday after a clash last month More

From South Africa to Vietnam, Cyclists Deliver Message Against Rhino Horns

Appalled by poaching they saw firsthand, sisters embark on tour to raise awareness in countries where rhino horn products are in demand More

Uber Wants Johannesburg Police Protection

Request follows recent protests outside ride-hailing service's Johannesburg office More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
New Implant Could Help Restore Movement to Paralyzed Limbsi
|| 0:00:00
...    
🔇
X
Maia Pujara
July 07, 2015 10:01 PM
A half-million people suffer spinal cord injuries each year because of car accidents, serious falls and diseases, according to the World Health Organization. Researchers are now working on a soft but strong spinal cord implant that could one day restore movement in paralyzed individuals. VOA’s Maia Pujara reports.
Video

Video New Implant Could Help Restore Movement to Paralyzed Limbs

A half-million people suffer spinal cord injuries each year because of car accidents, serious falls and diseases, according to the World Health Organization. Researchers are now working on a soft but strong spinal cord implant that could one day restore movement in paralyzed individuals. VOA’s Maia Pujara reports.
Video

Video Getting it Done Beyond a Nuclear Deal

If a nuclear deal is reached between Iran and world powers in Vienna, it will be a highly technical road map to be used to monitor nuclear activity in Iran for years to come to ensure Tehran does not make nuclear weapons. Equally as complicated will be dismantling international sanctions that were originally intended to be ironclad. VOA’s Heather Murdock talks to experts about the key challenges any deal will present.
Video

Video Rice Farmers Frustrated As Drought Grips Thailand

A severe drought in Thailand is limiting the growing season of the country’s important rice crop. Farmers are blaming the government for not doing more to protect a key export. Steve Sandford reports from Chiang Mai, Thailand.
Video

Video Making Music, Fleeing Bombs: New Film on Sudan’s Internal Refugees

In 2012, Sudanese filmmaker Hajooj Kuka went to make a documentary among civil war refugees in Sudan’s Blue Nile and Nuba Mountains region. What he found surprised him: music was helping to save people from bombing raids by their own government. VOA’s Carolyn Weaver has more.
Video

Video 'From This Day Forward' Reveals Difficult Journey of Transgender Parent

In her documentary, "From This Day Forward", filmmaker Sharon Shattuck reveals the personal journey of her transgender father, as he told his family that he always felt he was a woman inside and decided to live as one. VOA’s Penelope Poulou has more.
Video

Video Floodwaters Threaten Iconic American Home

The Farnsworth House in the Midwest State of Illinois is one of the most iconic homes in America. Thousands of tourists visit the site every year. Its location near a river inspired the design of the house, but, as VOA’s Kane Farabaugh reports, that very location is now threatening the existence of this National Historic Landmark.
Video

Video Olympics Construction Scars Sacred Korean Mountain

Environmentalists in South Korea are protesting a Winter Olympics construction project to build a ski slope through a 500-year-old protected forest. Brian Padden reports that although there is strong national support for hosting the 2018 Pyeongchang Winter Olympics, there are growing public concerns over the costs and possible ecological damage at the revered mountain.
Video

Video Xenophobia Victims in South Africa Flee Violence, Then Return

Many Malawians fled South Africa early this year after xenophobic attacks on African immigrants. But many quickly found life was no better at home and have returned to South Africa – often illegally and without jobs, and facing the tough task of having to start over. Lameck Masina and Anita Powell file from Johannesburg.
Video

Video Family of American Marine Calls for Release From Iranian Prison

As the crowd of journalists covering the Iran talks swells, so too do the opportunities for media coverage.  Hoping to catch the attention of high-level diplomats, the family of American-Iranian marine Amir Hekmati is in Vienna, pleading for his release from an Iranian prison after nearly 4 years.  VOA’s Heather Murdock reports from Vienna.
Video

Video UK Holds Terror Drill as MPs Mull Tunisia Response

After pledging a tough response to last Friday’s terror attack in Tunisia, which came just days before the 10th anniversary of the bomb attacks on London’s transport network, British security services are shifting their focus to overseas counter-terror operations. VOA's Henry Ridgwell has more.
Video

Video Hate Groups Spread Influence Via Internet

Hate groups of various kinds are using the Internet for propaganda and recruitment, and a Jewish human rights organization that monitors these groups, the Simon Wiesenthal Center, says their influence is growing. The messages are different, but the calls to hatred or violence are similar. VOA's Mike O’Sullivan reports.
Video

Video Blind Somali Journalist Defies Odds in Mogadishu

Despite improving security in the last few years, Somalia remains one of the most dangerous countries to be a journalist – even more so for someone who cannot see. Abdulaziz Billow has the story of journalist Abdifatah Hassan Kalgacal, who has been reporting from the Somali capital for the last decade despite being blind.

VOA Blogs