MANILA, Philippines (AP) -- Asian stock markets fluctuated between gains and losses Wednesday as a deadline for divided U.S. lawmakers to agree on a higher government borrowing limit drew ever closer.
Unless Congress acts by Thursday, the government will lose its ability to borrow and will be required to meet its obligations by relying on cash in hand and incoming tax receipts. That could mean the U.S. is unable to repay holders of Treasury bills that mature in coming days and would be in default on its debt.
Japan's Nikkei 225 was up 0.2 percent at 14,464.04 while Hong Kong's Hang Seng dropped 0.4 percent to 23,226.53. China's Shanghai Composite fell 1.4 percent to 2,203.34. Australia's S&P/ASX 200 added 0.2 percent to 5,268.20.
Stock indexes in Singapore, Malaysia, New Zealand and the Philippines eked out modest gains.
"The market is still relatively calm waiting for the storm to hit tomorrow, when the U.S. will reach its debt ceiling and then default will follow and all hell will break loose," said Francis Lun, chief economist at GE Oriental Finance Group in Hong Kong.
"Everybody is thinking the inevitable now. It is inevitable that the U.S. will miss an agreement before the deadline," he said.
On Wall Street, stocks were flat or down all day Tuesday, but the size of the losses waxed and waned depending on which politician was giving a press conference about the budget impasse. The market closed with its first loss in a week. Yields on short-term government debt rose sharply as investors worried about the possibility of a default.
Another reason for Wall Street's pessimism was that any deal reached this week might simply set up another showdown a few months down the road.
Lawmakers are also trying to agree on ending a partial government shutdown that has resulted in many Federal workers idled without pay.
The Dow Jones industrial average fell 133.25 points, or 0.9 percent, to 15,168.01. The Standard & Poor's 500 fell 12.08 points, or 0.7 percent, to 1,698.06. The Nasdaq composite fell 21.26 points, or 0.6 percent, to 3,794.01.
In energy markets, benchmark crude for November delivery was up 4 cents at $101.17 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.20 to close at $101.21 on Tuesday.
The euro fell to $1.3511 from $1.3522 late Tuesday in New York. The dollar rose to 98.53 yen from 98.22 yen.