Asian Market Update: Japanese equities decline on the Obama administration's failure to approve the viability plans of GM and Chrysler

- Asian equities are lower across the board, tracking Friday's decline in US equities. In Japan, the Nikkei 225 is lower by more than 1.5% led by losses in shares of automakers, property companies and banks. In Australia, the S&P ASX 200 is declining by more than 1.6%, led by declines in shares of most miners, banks and oil producers. However, shares of Rio Tinto are higher on a report in the London Telegraph which noted that BHP might seek to pursue a transaction with the company. The Kospi is lower by more than 1% on declines in shares of financials and industrials. In other Asian equities indices, China, Hong Kong, Taiwan and Singapore are all lower on today's session, in line with the regional trend.

- In currencies the USD and JPY were the leading gainers on today's session, as they tracked the losses in equities. In terms of economic data, Japan's Feb preliminary industrial production figures were worse than expected ((JP) JAPAN FEB PRELIMINARY INDUSTRIAL PRODUCTION MOM: -9.4% V -9.1%E (-10.2% PRIOR); YOY: -38.4% V -38.1%E (-31% PRIOR) ). However, according to companies in Japan, output in March and April may rise on a m/m basis.

- Crude oil prices are lower, tracking the declines in equities. Spot Gold prices are marginally higher at the time of writing. In terms of gold demand, the SPDR Gold Trust ETF disclosed that its holdings of the metal rose by 2.45 tons to a new record of 1,127 tons as of March 29.

- In terms of the US automakers, the Obama Administration rejected the restructuring plans from both GM and Chrysler because it believed that the plans did not represent viability. Following the decision by the Presidential Auto Task Force, the US government only plans to fund GM's operations over the next 60 days in order to give the company time to revise its viability plan. GM had requested up to $30B in loans. Additionally according to the Wall Street Journal, the Obama Administration forced GM's CEO Rick Wagoner to resign and he will be replaced by the company's COO Fritz Henderson. With respect to Chrysler, the US government's auto task force gave the company 30 days to complete its alliance with Fiat, and if this move is successful Chrysler may receive up to $6B in government aid. However, if Chrysler is unable to close its transaction with Fiat, the US automaker's government funding could be cut off. Additionally, the Obama administration has not ruled out a quick and orderly bankruptcy for either GM or Chrysler.