Asian shares tumbled again yesterday, with the Tokyo benchmark nose-diving 5.4 percent, as the region showed little sign of staging a recovery amid a global sell-off over US credit fears. European stocks, meanwhile, were mixed in early trade.
The US dollar's decline that worsened earnings prospects for Japanese companies added to the battering Tokyo's benchmark has been taking in recent sessions, sending the Nikkei 225 index crashing 874.81 points, or 5.4 percent, to close at 15,273.68, its lowest close in a year.
Hong Kong's blue chip Hang Seng Index was down as much as 5.2 percent midafternoon, but recovered to close the session down 1.4 percent. The Korea Composite Stock Price Index lost 3.2 percent after dropping 6.9 percent the previous session.
In early European trade, on the London Stock Exchange the FTSE100 index was up 0.66 percent, France's CAC 40 index edged slightly higher, up just 0.39 percent. In Frankfurt, Germany, the DAX was effectively unchanged, down just 0.05 percent.
Some Asian markets had tried to buck the trend on early bargain hunting but quickly began falling across the board, continuing a worldwide sell-off that has hit recently over the US subprime mortgage crisis.
"The fear factor has overtaken people," said Song Sen Wun, regional economist at CIMB-GK Research Pte in Singapore, adding that people could realize that the fears are overblown as quickly as Monday.
"Whether this is a case of blind panic remains to be seen," he said by telephone from his Singapore office.
The Philippine 30-company stock index closed at a new low for the year, losing 2 percent to its lowest level since Dec. 27.
New Zealand's NZX-50 index shed 1.63 percent in a rush of selling in the last hour of trading. Shares were also down in Australia, India, Malaysia, Singapore and China.
Credit Suisse chief strategist Shinichi Ichikawa said any bad news ahead, such as a bank abroad faltering, could worsen the market jitters.
"The next couple of weeks will be a very tough time for global financial markets," he said.
Earlier yesterday, Japan's central bank injected ?1.2 trillion (US$10.5 billion) into money markets -- the third injection this week and triple the amount it injected the day before -- in a bid to curb rises in key interest rates.
Central banks in the US, Europe, Australia and Japan have injected tens of billions of dollars into money markets since Aug. 9, when stocks tumbled because of worries over US subprime mortgage problems. So, far the extra money, meant to ease concerns about a credit crunch, has been unable to halt the global sell-off.
In Japan, a further fall of the US dollar against the yen led stocks lower. The US dollar slid to ?111.80 by late afternoon, down from ?113.11 late on Thursday in New York. That's the US dollar's lowest level since June last year, and breaks an overnight low of ?112.01.
The Japanese yen has gained sharply this week as investors buy the currency to pay back low interest yen loans they had used to invest in emerging markets.
The Dow Jones industrial average closed down just 16 points on Thursday after falling more than 340 points during the day, pulling off a dramatic late session turnaround on massive bargain hunting.