Japan: Markets 'disappointed' over failed US debt deal

Japan's finance minister said Tuesday financial markets were "very disappointed" over the failure of a US Congress "supercommittee" to reach a deal on reining in ballooning budget deficits. "I can see that the markets are very disappointed," Finance Minister Jun Azumi told a regular news conference, referring to an overnight plunge on Wall Street. The blue-chip Dow Jones Industrial Average fell 2.10 percent to 11,548.14 while the broad-based S&P 500 index was down 1.85 percent to 1,193.11. "I think this could have an impact on the Tokyo markets," Azumi said early Tuesday. The benchmark Nikkei 225 index at the Tokyo Stock Exchange, which closed at its lowest level since March 2009 on Monday, opened down 1.01 percent. The index then recovered some lost ground as the dollar rose above 77.00 yen from 76.92 yen in New York late Monday. A strong yen hurts exporters by reducing their repatriated revenue. The index was hovering around the break-even point in mid-morning trade. Azumi added markets had doubts over the ability of politicians in the United States and Europe to deal with deep-seated economic problems. "Japan's political situation is more stable when it is compared with the rest of the world," he said, noting the success of Japanese lawmakers Monday in passing a 12.1-trillion-yen ($157 billion) extra budget through parliament. The third supplementary budget this year is aimed at boosting post-quake reconstruction and giving a fillip to an economy hit by slow global growth and a strong yen. A US Congress "supercommittee" announced Monday it had failed to reach a debt deal, after angry partisan battles over the best way to revive the sluggish economy. It confirmed widespread expectations that the 12-member committee would fail in its mission to cut US deficits by $1.2 trillion over 10 years amid political feuds over tax hikes on the rich and cuts to social spending. Global financial markets are already rattled by Europe's debt crisis and weighed down by the stuttering US economy.