Newsday

Asian Markets Fall

by THOMAS WAGNER Associated Press Writer

TOKYO (AP) -- Asia's top three stock markets traded lower on Monday, ahead of interest rate decisions in Japan and the United States and a meeting by leaders of the world's two largest economies.

Stocks also started lower in Europe, but trading around the world seemed tame compared to the big losses on Wall Street last week. Many investors seemed to sit on the sidelines, awaiting moves to spur the economy.

The indecision was most evident in Japan, where the Nikkei Stock Average of 225 stocks opened lower, rose 2 percent, then ended the day down 42.01 points, or 0.34 percent, at 12,190.97.

Last week, the Nikkei fell more than 3 percent, hitting a new 16-year low, as the government acknowledged the economic outlook was deteriorating.

After the Tokyo stock market closed, the Bank of Japan announced it would increase the money supply at commercial banks and buy up government bonds in an effort to slow the country's growing financial crisis.

The Bank of Japan's policy board, which had been expected to cut a key interest rate to zero, said its move would have the same effect. The bank had put the rate at zero for 18 months before nudging it up to 0.25 percent in August.

Elsewhere in Asia, the blue chip Hang Seng stock index in Hong Kong slipped 0.47 percent, and Singapore's benchmark Straits Times index fell 2.8 percent. In Singapore, traders blamed Wall Street's losses.

In late morning trading in Europe, London's benchmark Financial Times-Stock Exchange index was down 0.20 percent, Frankfurt's Xetra DAX index was down 0.87 percent and the CAC 40 in Paris was down 1 percent.

On Tuesday, the U.S. Federal Reserve is expected to slash interest rates by at least a half point. American investors hope that will help the battered Dow Jones Industrial Average and Nasdaq composite index, and slow the downturn in the U.S. economy.

Last week, the Dow traded below 10,000 points for the first time since October, suffering its worst-ever weekly decline of 821.21 points and 16 percent of its high. The Nasdaq, dominated by tech stocks, is now down 63 percent from its peak last March, while the Standard & Poor's 500, a widely followed index of large companies, is down 25 percent from its peak.

President Bush and Prime Minister Yoshiro Mori were scheduled to meet in Washington on Monday, reportedly in an effort to coordinate economic policies and avoid recessions in the world's largest and second-largest economies.

Some analysts expected Bush and Mori to say they will tolerate a lower yen in an effort to help shore up the Japanese economy by helping its exports. But Haruhiko Kuroda, Japan's vice finance minister for international affairs, said Monday in Tokyo that the summit isn't likely to produce such a deal.

The summit is further complicated by the fact that even as Japan's economic outlook deteriorates, Mori is widely expected to step down next month over gaffes and scandals that have sent his popularity plunging.

That means Bush will essentially be meeting with a lame-duck leader.

AP-NY-03-19-01 0714EST< 

-- Rachel Gibson (rgibson@hotmail.com), March 19, 2001