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Stocks fall amid European debt risk

Asian stock markets were mostly lower amid worries about weak Christmas sales in the United States and Europe and a warning by Japan's central bank about possible risks from the European debt crisis.

Tokyo lost 0.4% to 8,442.5 while China's benchmark Shanghai index edged up 0.1% to 2,191.23. Seoul, Taipei, Singapore and Jakarta declined. Hong Kong and Sydney were closed.

Investors are pessimistic amid expectations that upcoming indicators including Chinese manufacturing and Christmas retail sales in key Western markets will be lacklustre, said Peng Yunliang, a market strategist for Shanghai Securities.

"The markets expect these data will be no good," Peng said. "Some people think sales data from Christmas in the United States and Europe will not be as good as last year."

Tokyo's Nikkei 225 declined after the Bank of Japan released notes that showed a Finance Ministry representative warning at a November meeting the world's third-largest economy faces "significant downside risks" due to Europe's debt problems.

Wall Street and European stock markets were closed yesterday because Christmas fell on a Sunday this year.

Elsewhere in Asia, Seoul's Kospi shed 1% to 1,838.34 while Taiwan's Taiex lost 0.4% to 7,066.01. Singapore's benchmark was off 0.1% at 3,673.14.

Asian investors are closely watching Europe, whose debt crisis already has hurt demand for exports from China and other major producers.

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