Japan stocks fall after economy contracts, other markets up

BEIJING (AP) - Japanese stocks sank while other Asian markets gained Monday after Japan reported a record economic contraction as the coronavirus pandemic weighed on retailing, investment and exports.

Investors in Asia looked ahead to central bank meetings this week in China, Indonesia and the Philippines, with few other market-moving events in sight.

The Nikkei 225 in Tokyo fell 0.6% to 23,145.28 after the data showed the world's third-largest economy shrank 27.8% from a year earlier in the three months ending in June. That was bigger than the country's deepest decline during 2008-09 financial crisis.

The quarterly decline was 7.8%, not quite as sharp as the 9.5% drop for the U.S. economy for the last quarter. But Japan's economy was already growing very slowly when it fell into recession late last year. And the current slowdown came without any full shutdowns to control the pandemic.

'œThe road ahead looks choppy as a resurgence in Covid cases will weigh on domestic and overseas spending,'ť said Stefan Angrick of Oxford Economics in a report.

The Shanghai Composite Index rose 1.9% to 3,423.56 and Hong Kong's Hang Seng gained 1.2% to 25,502.45. South Korean markets were closed for a holiday.

The S&P-ASX 200 in Sydney shed 0.6% to 6,092.10. New Zealand and Singapore advanced.

Wall Street ended last week little-changed.

The benchmark S&P 500 index declined less than 0.1% to 3,372.85, near its record high. The Dow Jones Industrial Average gained 0.1% to 27,931.02. The Nasdaq composite dipped 0.2% to 11,019.30.

Economists say consumer spending could be under more pressure after government aid including additional $600 weekly unemployment benefits expired. Investors are counting on Washington for another economic lifeline, but legislators are far apart on a possible package.

In energy markets, benchmark U.S. crude gained 36 cents to $42.37 per barrel in electronic trading on the New York Mercantile Exchange. The contract slipped 23 cents on Friday to settle at $42.01. Brent crude, the standard for international oil prices, added 30 cents to $45.10 per barrel in London. It 16 cents the previous session to $44.80.

The dollar declined to 106.55 yen from Friday's 106.59 yen. The euro gained to $1.1859 from $1.1843.