Asian markets were lower on Wednesday despite a US budget deal that aims to avoid a repeat of a government shutdown that paralysed Washington in October.
Tokyo declined 0.47 percent, Shanghai lost 0.92 percent, Hong Kong fell 0.67 percent and Sydney was down 0.24 percent while Seoul traded flat.
Congressional negotiators on Tuesday reached a two-year deal on US spending which President Barack Obama hailed as a sign of rare bipartisan cooperation in the strife-filled US legislature.
Under an agreement reached in October that ended a crippling 16-day shutdown, US federal spending authority expires on January 15, when a new agreement will need to be in force.
Tuesday’s deal sets the new annual budget caps for 2014 and 2015 at just over $1 trillion — slightly higher than current levels — and at least partially repeals the automatic, widely loathed budget cuts known as “sequestration”.
It provides for $85 billion in mandatory savings while allowing for $63 billion in sequestration relief, leaving $22 billion in deficit reduction, according to the deal’s main brokers.
By most accounts the agreement is an underwhelming one, far from the grand bargain envisioned by some optimists in Washington earlier this year.
But it sets the warring Democratic and Republican Parties on track for further cooperation on fiscal policy, ending the cycle of budget feuding that has marred Washington since 2011.
The challenge now is selling the agreement to sceptical conservatives and liberals in the Senate and House of Representatives.
Earlier, US stocks ended lower as investors looked ahead to a retail sales report that covers the beginning of the critical holiday shopping season.
The Dow Jones Industrial Average fell 0.33 percent to 15,973.13.
The US dollar fell again Tuesday as expectations for significantly tighter monetary conditions from the Federal Reserve dissipated on hints of only a slight taper of its stimulus.
St. Louis Fed President James Bullard said Monday that a marginal tapering of the bank’s $85-billion-a-month bond-buying scheme could be on the cards at its December 17-18 policy meeting.
The dollar fetched 102.84 yen early Wednesday, hardly changed from 102.81 yen in New York Tuesday afternoon but down from 103.30 yen in Tokyo on Tuesday.
The euro bought $1.3761 and 141.60 yen, almost flat from $1.3760 and 141.68 yen in US trade.
On oil markets, New York’s main contract, West Texas Intermediate (WTI) for January delivery, was up two cents at $98.53 in early Asian trading while Brent North Sea crude for January eased three cents to $109.35.
Gold fetched $1,258.20 at 0220 GMT compared with $1,247.49 late Tuesday.
Source: AFP
