Investors believe ``what is bad news for the US is probably worse news for Asia in the short term so what is good news for the US is good news for Asia, '' said Pelham Smithers, stragegist at ING Barings Japan. ``That is the attitude right now and it may be wrong.''

Tokyo shares rallied 2.2 per cent in the belief that Clinton had been thrown a lifeline through the Republicans' reticence to go for the jugular and the lack of greater damage in independent counsel Kenneth Starr's report, he said.

But the big risk is that Clinton remained in office, hobbled by the scandal and facing a Congress willing to give him rope enough for a hangingbut unwilling to deliver legislative success, said Smithers. ``Where we see the big problem lying is if you get into the situation whereby Congress and Clinton are at loggerheads,'' threatening critical legislation such as recapitalising the International Monetary Fund.

There is a raft of hypothetical logjams making it harder for Washington to respond to ``suddenly created financial crises whether it be in Asia, Latin America or Russia,'' Smithers said.

One foreign brokerage analyst in Bangkok agreed. ``My feeling is that the whole Clinton affair makes getting funding for the IMF through Congress more difficult,'' he told AFP.

Singapore's Straits Times said in an editorial that at best Congress may censure Clinton and at worst impeach him. ``In the meantime, the presidency will be reduced to a semen-stained shell and the government of the sole remaining superpower will be paralysed even as the world faces its worst economic crisis since the 1930s,'' it said. Tae Chung of SG Asia Securities in Seoul said``concerted US leadership in Asia's crisis and in Russia's is essential to these economies recovering and therefore to the global economy.''

``"We need orchestrated and intense efforts from the United States and Russia to Help ease these crises, and this political crisis obviously distracts attention from these needs,'' he added.

The flip side, according to Lehman Brothers' Japan Chief economist Russell Jones, is that Clinton could show greater determination to tackle international crises. ``They will try to do something positive as a as a way of deflecting attention from the President's pecadillos,'' said Jones, forecasting for example a rescue package for Latin America.

Congress members were unlikely to block such manoeuvres, he said. ``They will at the end of the day see it as a better alternative to letting Latin America go down the toilet.'' Jones noted the threat of downward pressure on US equity prices, which would "not be good for the US economy, and not good for anybody. It is in nobody'sinterest for the world economy to go into recession." The weakness of the dollar since the Clinton crisis struck benefitted Asian currencies linked to the greenback such as the Hong Kong dollar and China's yuan, he said.

But for Japan, the world's second biggest economy, every 10 per cent increase in the value of the dollar against the yen leads to a one per cent fall in gross domestic product over two years, said Jones. ``You have to weigh up whether throwing Japan further into recession would be doing more damage than taking pressure off exchange rates such as the yuan and Hong Kong dollar,'' he said.

Many in the markets were skeptical, however, that Clinton's fortunes could bear heavily on the world, wit analysts in the Philippines, Hong Kong and Jakarta doubt ing a direct impact on their markets unless the US economy falls. ``I don'T think one person can bring the entire global economy down,'' said Harry Liu, chairman of the Philippine Stock Exchange, admitting however that the crisis could deflectsome attention from Asia.

In New Delhi, Mecklai Financial Services' senior currency analyst K N Dey said in India's controlled economy, ``market players will remain passive watchers of what is happening, more out of curiosity than anything else.''

Meanwhile, Japanese share prices rallied 2.2 per cent Monday as the Ruling party moved to break the deadlock in a parliamentary debate over rescuing the flagging banking industry, brokers said. The key Nikkei stock average of the Tokyo Stock Exchange gained 310.39 points to finish at 14,227.37. It was a turnaround from a 5.1 per cent, 749.05-point plunge on FridayIndonesian share prices closed one per cent down in thin trade Monday with riots in the western provincial city of Medan adding to market concerns over social unrest Thai shares fell 0.7 per cent Monday on last-minute profit taking, ending off their earlier highs in thin trade supported by gains in other regional markets, analysts said.

The Stock Exchange of Thailand (SET) broad-based index fell1.36 points to closeat 211.34 points, while the select SET 50 was down 1.10 points to close the day at 14.13 points.

Malaysian share prices closed 6.7 per cent higher Monday as a burst of buying by local funds in the last hour of trade reversed earlier losses, dealers said.