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

Philippines, Muslim Rebels Try to Salvage Peace Pact

Peace process faces major setback after botched military operation to find terrorists results in bloody gunbattle between government forces, Moro Islamic Liberation Front fighters More

Republicans Expect Long, Expensive Presidential Battle

Political strategist says eventual winner will be one who can put together strongest coalition of various conservative groups that make up Republican Party More

Video New Wheelchair Is Easier to Use, Increases Mobility

Engineers have come up with a lever-operated design that makes use of easily accessible bicycle technology 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.
Liberia's Almost Last Ebola Patient Grateful but Still Grievingi
X
Benno Muchler
March 26, 2015 3:41 PM
Beatrice Yardolo was to make history as Liberia’s last Ebola patient. Liberians recently started counting down 42 days, the period that has to go by without a single new infection until the World Health Organization can declare a country Ebola-free. That countdown stopped on March 20 when there was another new case of Ebola, making Yardolo’s story a reminder that Ebola is far from over. Benno Muchler reports from Monrovia.
Video

Video Liberia's Almost Last Ebola Patient Grateful but Still Grieving

Beatrice Yardolo was to make history as Liberia’s last Ebola patient. Liberians recently started counting down 42 days, the period that has to go by without a single new infection until the World Health Organization can declare a country Ebola-free. That countdown stopped on March 20 when there was another new case of Ebola, making Yardolo’s story a reminder that Ebola is far from over. Benno Muchler reports from Monrovia.
Video

Video Cambodian Land Grabs Threaten Traditional Communities

Indigenous communities in Cambodia's Ratanakiri province say the government’s economic land concession policy is taking away their land and traditional way of life, making many fear that their identity will soon be lost. Local authorities, though, have denied this is the case. VOA's Say Mony went to investigate and filed this report, narrated by Colin Lovett.
Video

Video US, South Korea Conduct Joint Military Exercises

The Eighth U.S. Army Division and the Eighth Republic of Korea Mechanized Infantry Division put on a well orchestrated show of force for the media this week during their joint military training exercises in South Korea. VOA’s Seoul correspondent Brian Padden was there and reports the soldiers were well disciplined both in conducting a complex live fire exercise and in staying on message with the press.
Video

Video Space Program Status Disappoints 'Last Man on the Moon'

One of the films that drew big crowds last week at the annual South by Southwest festival in Austin, Texas, tells the story of the last human being to stand on the moon, U.S. astronaut Eugene Cernan. It has been 42 years since Cernan returned from the moon and he laments that no one else has gone there since. VOA’s Greg Flakus reports.
Video

Video Young Filmmakers Shine Spotlight on Giving Back

A group of student filmmakers from across the United States joined President Barack Obama at the White House this month for the second annual White House Student Film Festival. Fifteen short films were officially selected from more than 1,500 entries by students aged 6 through 18. The filmmakers and their families then joined the president and a group of celebrities for a screening of their films. VOA’s Julie Taboh reports.
Video

Video VOA Exclusive: Interview with Afghan President Ashraf Ghani

Afghan President Ashraf Ghani, during his first visit as president to Washington, gave a one-on-one interview with VOA Afghan Service reporter Said Suleiman Ashna, about his request for a change in U.S. troop levels, the threat from the Islamic State, and repairing relations with the United States and Pakistan. The interview was held at Blair House, late Sunday, in Pashto.
Video

Video California Science Center Tells Story of Dead Sea Scrolls

The ancient manuscripts were uncovered in the mid-20th century, and they are still yielding clues about life and religious beliefs in ancient Israel. As VOA's Mike O'Sullivan reports, an exhibit in Los Angeles shows how modern science is bringing the history of these ancient documents to life.
Video

Video Angelina Jolie Takes Another Bold Step

Hollywood actress and filmmaker Angelina Jolie has revealed she had her ovaries and fallopian tubes removed to lower her odds of getting cancer. Doctors say the huge publicity over her decision will help raise awareness about the importance of cancer screening. VOA’s George Putic has more

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More