Asian shares sank on Thursday to their lowest this month on uncertainty about whether the United States can succeed in its massive
banking rescue and a revenue warning from Intel Corp.
The Japanese yen retreated against the euro and the dollar after soaring on Wednesday on a flight-to-quality. Other Asian currencies fell, while Australia's central bank stepped in to support its tumbling Australian dollar.
Evaporating confidence in the global economy boosted regional bonds, while knocking down oil and metals such as platinum.
"It's pretty much weakness across the board," said Yutaka Miura, senior technical analyst for Shinko Securities in Japan.
"There is a renewed recognition of the weakness in the economy and corporate earnings," Miura said.
Asian shares followed Wall Street lower after the US Treasury on Wednesday backed away from using a $700 billion bailout fund to cleanse bank balance sheets of bad mortgage debt to focus on buying stakes in US banks and The shift in focus not only created uncertainty, but came as Europe reported more gloomy economic news, heightening fears of a global recession.
News that Intel Corp slashed its fourth-quarter revenue forecast, citing weak demand across the world for all its products added to the worries.
The MSCI index of Asian stocks outside Japan fell more than 4.5% to its lowest level since Oct. 30. Japan's Nikkei average dropped 5 per cent, with exporters such as Honda Motor hit amid concerns about the impact from a stronger yen. Other stock markets were also battered: South Korea, Australia, Hong Kong and Taiwan tumbled more than 4 per cent each, and Shanghai fell about 1%.
The US dollar edged up to around 95.57 yen as investors took profits on the yen's strong gains the previous session.
The euro also rebounded, rising to 119.15 yen up 0.3% from late US trade, after briefly falling as low as 117.65 yen on trading platform EBS earlier in Asian trade.
Traders said thin liquidity in the market was exaggerating price movements. Other Asian and Pacific currencies fared worse.
The battered Australian dollar edged up to $0.6410 after the central bank said it had intervened to support a sliding currency that fell to $0.6347 on Wednesday -- its lowest in two weeks. Regional government bonds gained from the volatility elsewhere, with Japan's December 10-year JGB futures up 0.45 point to 138.54, after climbing as high as 138.79.
Commodities dropped amid concern that sputtering economic growth would curb demand for everything from oil to grain and on widespread risk aversion. US crude futures fell 72 cents to $55.45, while platinum sank to $785.00 from its New York notional close of $810.