The stock markets in Japan fell to a new nine-month low this morning. The stocks were also down in other Asian markets weighed down by fears of a US economic slowdown. It comes the day after London's FTSE 100 fell 4.1%. This report from Jonathan Head:

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Asian financial institutions are thought to have only limited exposure to the collapse in the US sub-prime mortgage business. Instead it is fear of a wider US economic slowdown, driven by the sub-prime mortgage mess that's hitting Asia's export-dependent industries. Shares in Japan's leading car-makers suffered some of the sharpest falls.

Sentiment in Japan is also being hit by fear that the so-called 'yen carry trade' is unwinding. In recent years speculators have borrowed vast quantities of yen, because of Japan's abnormally low interest rates, to invest in other currencies and markets. That's kept the yen weak. Now that global markets are in retreat, the speculators are paying back their yen loans. As a result the yen is rising fast against the dollar - hurting Japanese exporters.

Jonathan Head, BBC News, Bangkok

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If the United States sneezes, Asia catches a cold
here, if markets in the US are doing badly, it directly affects Asian markets (badly)

driving
making, forcing

to pull out of
to stop being involved in

limited exposure
not being affected too much

sub-prime mortgage
a sub-prime mortgage lender is one who lends to borrowers who do not qualify for loans from mainstream lenders

sharpest falls
sudden big reductions in value/price

Sentiment
a thought, opinion or idea based on a feeling about a situation

yen carry trade
the practice of cheaply borrowing yen to finance investments around the world

vast quantities
a lot, a very large amount

in retreat
receding, falling

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