Asian markets hit by US fears, weak yen lifts Tokyo

HONG KONG: Asian markets were mostly lower on Thursday after Barack Obama challenged Republicans to accept tax hikes for the rich as part of any deal to averting a fiscal cliff.
Tokyo's Nikkei was the only index in positive territory as the yen eased after Japan's Prime Minister announced a general election for next month, which is expected to be won by the opposition.
A close eye is also being kept on Beijing, where China will unveil it leaders for the next 10 years, with investors hoping for reform-minded lawmakers to run the world's number two economy.
Hong Kong tumbled 1.07 percent, Sydney shed 0.86 percent and Shanghai was 0.62 percent lower while Seoul slumped 1.62 percent.
However, Tokyo rose 0.92 percent.
Jakarta and Kuala Lumpur were closed for public holidays.
Obama, in his first news conference since re-election, on Wednesday laid out his terms for a deal on avoiding the fiscal cliff of tax hikes and spending cuts that are due on January 1 and are expected to tip the US back into recession.
Obama said he wanted to extend tax cuts for 98 percent of Americans but insisted any agreement could not include breaks for the wealthiest two percent, a position most Republicans have rejected.
"Let's go ahead and lock that in. That will be good for the economy. It will be good for consumers. It will be good for businesses. It takes the edge off the fiscal cliff," Obama said.
Wall Street reacted negatively as traders fear the president's position could spell out a long, bloody battle between the bitterly divided Republicans and Democrats that could end with no compromise.
The Dow tumbled 1.45 percent to its lowest close since June 26, while the S&P 500 lost 1.39 percent and the Nasdaq fell 1.29 percent.
However, while dealers grow fearful over the brewing US row, they welcomed Japanese PM Noda's decision to call a national poll for December 16, bringing an end to months of speculation.
The election is widely expected to be won by the opposition Liberal Democratic Party, which is considered to be in favour of a looser monetary policy that would see more yen flood the market.
The news sent dealers out of the yen in New York, where the euro surged to 102.19 yen from 100.85 yen and the dollar gained to 80.23 yen from 79.38 yen.
In early Asian trade on Thursday the euro was at 102.10 yen and the dollar bought 80.19 yen.
Europe's single currency traded at $1.2727, compared with $1.2734.
However eurozone fears remain as anti-austerity strikes kicked off around the continent, hitting Spain, Portugal, Italy and Greece.
Adding to worries was another steep fall in gross domestic product for Athens and Lisbon, while dealers nervously await data for Germany, Spain, Italy, France and the eurozone later in the day.
In company trading Sony slumped more than 10 percent to more than 30-year lows on the Nikkei after it said it would issue bonds worth 150 billion yen to raise cash for investment and repay debts, fuelling fears of stock dilution.
Oil was mixed in Asia Thursday, with New York's main contract, light sweet crude for delivery in December falling eight cents to $86.24 a barrel while Brent North Sea crude for December delivery gained seven cents to $109.68.
Gold was at $1,723.35 by 0100 GMT compared with $1,725.78 late Wednesday. (AFP)