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Asian Markets Sink, Yen Weighs on Tokyo

Asian markets were sharply lower Thursday as weak U.S. retail sales highlighted the long road to economic recovery, prompting profit-taking on winning bets in equities, higher-yielding currencies and commodities over the past two months.

The retreat in Asian shares tracked the overnight drop on Wall Street after retail sales posted an unexpected drop in Apriland suggested that consumers were still struggling from job losses, falling home prices and tighter credit.

The U.S. dollar edged up from a four-month low hit the previous day as investors gradually shifted funds away from the safe-haven U.S. currency and into riskier assets on hopes the global economy had bottomed out from its deepest recession since World War Two. Oil prices pulled further away from a six-month peak reached this week, trading below below $58 a barrel, while the Australian dollar edged up but was off a seven-month high reached earlier in the week.

Japan's Nikkei 225 Average lost 2.6 percent to hit a two-week closing low as exporters slid on a firmer yen and renewed concerns about the U.S. economy, while Nikon tumbled 8.3 percent after it forecast its first annual operating loss in 11 years. Panasonic dropped sharply, finishing 4.4 percent lower after a newspaper said the consumer electronics maker is likely to post a net loss of more than $1.1 billion this financial year.

South Korea's KOSPI closed down 2.3 percent led by key exporters and banks after gloomy U.S. data, but issues added to the MSCI Korea Standard Index, including SK Broadband, outperformed.

Australian stocks ended 3.4 percent to a two-week closing low, down for a fourth straight session. Miners, which have rallied sharply over the past three months, led the market down on doubts about a global economic recovery. Top global miner BHP Billiton fell 6.1 percent, while Alumina was down 12.4 percent.

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Hong Kong shares dropped 3 percent in shrinking turnover as investors deemed stocks too expensive after a sharp recent rally and used dismal U.S. retail sales data as an excuse to lock in gains. Shares in global lender HSBC led losses with a 4.2 percent slide after shooting up more than 110 percent since it announced its massive cash call early in March. Hong Kong Exchanges & Clearing, which reported a 49 percent drop in its first-quarter earnings on Wednesday, slid 7.1 percent as analysts saw the stock as overvalued after its recent gains.

Singapore's Straits Times Index shed 2.9 percent. SingTel, Southeast Asia's largest telecommunication firm, moved back into the black, up 0.7 percent despite reporting that quarterly net profit fell 17 percent.

China's Shanghai Composite Index sank 0.9 percent, hit by broad-based selling as weak markets overseas encouraged profit-taking after a recent run-up to nine-month highs, while heavily weighted PetroChina slipped.