Asian stocks cautious, Tokyo withstands tankan

Asian stocks cautious, Tokyo withstands tankan

Jennifer Chen, Agencies, Singapore

Japanese shares surged two percent on Monday shrugging off yet
another gloomy indicator from the world's second largest economy,
as investors elsewhere braced for an expected U.S. military
strike against Afghanistan.

Markets in Greater China and South Korea were closed for their
annual harvest festivals, giving Asian investors pause to ponder
what implications a U.S. military strike might have on the
volatile Middle East and its rippling effect on oil prices.

Tokyo's blue-chip Nikkei index climbed 2.02 percent to
9,972.28, despite a rash of profit warnings in the high-tech
sector and a gloomy business sentiment survey.

The yen held its ground despite the Bank of Japan's September
"tankan" survey, which showed the headline diffusion index
stumbling to minus 33 from minus 16 in June.

But the Japanese currency was later felled by threats of
intervention from Ministry of Finance officials, eager to show
the seriousness of their intent to drive the yen lower after last
week's limited success at knocking it down.

A stronger yen means less export competitiveness, which Japan
can ill-afford now.

Shares in Manila, Jakarta, and Bangkok lost ground as
investors fretted over the possibility of U.S. military action.

In Jakarta, investors worried that Muslim radicals may
retaliate against foreigners if the U.S. attacks Afghanistan.

The JSX Composite index ended down 1 percent, or 3.804 points,
at 388.675. Decliners led gainers 85 to 27 with 66 stocks
unchanged.

Volume was light at 244 million shares valued at 207 billion
rupiah (US$20.9 million).

Dealers said the weaker rupiah is also hurting sentiment
towards the bourse, with some currency traders now tipping the
rupiah will slip to 10,000 against the U.S. dollar this week.

Singapore stocks bucked the downtrend in Southeast Asia thanks
to gains in heavyweights Singapore Press Holding, Singapore
Airlines and DBS Group.

Though the region was quiet, this week was shaping up to be a
busy one in the United States, with the National Association of
Purchasing Management issuing its September index on Monday and
the Labor Department releasing its September jobs data on Friday.

The week's main event is the Federal Open Market Committee
meeting on Tuesday, which the market expects will produce another
rate cut to help the badly shaken U.S. economy.