 No cheer for Japanese investors |
Japan's leading stock market index, the Nikkei, has fallen to its lowest level since March 1983. The Nikkei fell 2.7% to 8,144 points after a combination of scandal allegations and war fears sparked a widespread sell-off.
A war with Iraq appeared to be closer after US President George W Bush said the US would call for a vote on a second United Nations resolution on disarming Iraq, whatever the level of support in the Security Council.
There were also growing fears over political tension in Asia after reports that Pyongyang was preparing to test a mid-range missile.
Japan's ailing stock market has been hovering close to 20-year lows for some time as the state of the economy and a wave of bankruptcies have undermined investor confidence.
Last month Japan's economy minister called on his cabinet colleagues, including the Prime Minister, to start buying shares in an attempt to prop up the market.
Scandal
The renewed war fears coincided with reports that Nikko Salomon Smith Barney was to be fined for share price manipulation.
The reports sent stocks in the brokerage, partly owned by US Citigroup, down by 12%. Japan's Securities and Exchange Surveillance Commission said on Friday the brokerage should be punished for manipulating share prices linked to exchange-traded funds.
Other financial institutions were also dragged lower by the reports, and by the arrest of a member of the liberal democratic party for allegedly covering up corporate donations for political fundraising.
"One of the most detested by foreign investors is a series of scandals - with the latest one just appearing recently - that could cause political instability before the election season starts," said Koji Muneoka of HSBC Securities.
One-Minute World News 
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