US Recovery Questions Send Japan Stocks Tumbling

TOKYO (AP) — Japanese stocks retreated sharply Monday, along with investor confidence in the U.S. economy.

The benchmark Nikkei 225 stock index slid 231.79 points, or 2.3 percent, to 9,802.95 — its lowest close since Oct. 7. The broader Topix index lost 1.6 percent to 880.54.

The Nikkei led regional declines that followed a Wall Street sell-off Friday amid fresh concerns about U.S. consumers, whose spending is critical for Japanese exporters. Government figures for September showed personal spending and consumer sentiment both fell, while personal spending stayed flat.

More bad news came on Sunday when lender CIT filed for Chapter 11 protection in one of the biggest bankruptcy filings in U.S. corporate history, following Lehman Brothers, Washington Mutual, WorldCom and General Motors.

"Japanese markets have always been relatively pessimistic about a U.S. economic recovery," said Masayoshi Okamoto, head of dealing at Jujiya Securities in Tokyo. "The whole world is watching the U.S. economy, but Japanese markets tend to reactly more harshly to bad news."

Japan has undergone financial crisis and recession before, and investors here remember just how hard it is to avoid economic stagnation, he said.