Asian markets closed lower Friday, with investors spooked by fresh evidence that the U.S. economy is in recession. Japan and South Korea both closed 1 percent lower.
Concern that the world's top economy was seriously flagging was heightened after the Philadelphia Fed reported that its gauge of regional factory activity fell to minus 24 in February from an already weak minus 20.9, which had been its worst reading since the 2001 recession.
Economists had expected a slight bump up in the gauge to minus 11. In addition, U.S. crude oil futures dropped on news that supplies rose by 4.2 million barrels, almost twice as much as expected, and as billionaire investor Boone Pickens told CNBC he was short-selling the commodity and expects prices of oil and natural gas to fall up to $15 a barrel in the second quarter.
Japan's Nikkei 225 Average closed 1.3 percent lower as weak economic data fed worries about a U.S. recession and spooked investors, with Canon and other exporters down as the yen gained ground. But the exporter weakness and a tumble by mobile carrier KDDI were met by gains in metals firms including Toho Zinc, which extended its Thursday surge on soaring metals prices and kept the market from sliding further.
The government lowered its assessment of Japan's economy for the first time in 15 months and cautioned against rising risks from a slowdown in the U.S. economy, its major export destination.
It also revised down its assessment of exports and industrial output, the brightest spots in the world's second-largest economy, in a monthly report.