Asian markets snapped a four-day winning streak Friday and the yen and U.S. dollar rose as investors retreated to safety with job losses accelerating globally while Washington scrambled to finalize a fix for banks.
Wall Street shares dove after a report said continuing claims for U.S. unemployment were at a record high, while Nikkei tumbled after data showed unemployment in the world's second-largest economy at a near three-year high and industrial output plunging by a record 10 percent last month. The dollar dipped against the yen though month-end dollar demand from Japanese companies capped losses. U.S. crude prices were steady above $41 a barrel as concerns about a potential strike among unionized U.S. refinery workers kept in check demand worries after bleak economic data from the world's top oil consumer nation.
The New Zealand dollar , once favored by investors because of its high yield, dropped to another six-year low after the country's central bank governor said interest rates will likely have to be cut further, with swarming economic problems hurting almost every corner of the world. The comments came just a day after the central bank slashed its benchmark rate by 150 basis points.
The severely weak economic reportssupported expectations that Japan's economy shrank by a double-digit percentage on an annual basis in the last three months of the year.
The Nikkei 225 Averageclosed 3.1 percent lower, sliding on growing economic woes and a 17 percent tumble by Toshibashares after it was hit by a ratings cut, a massive loss forecast, and news it may merge some chip operations with NEC. A firmer yen and deepening recession worries also hit other exporters. Nintendo fell 12 percent after it cut its Wii game console sales target and profit forecasts. Toyota Motor shed 4 percent after source said its annual operating loss is likely to be bigger than the automaker's latest forecast, though market analysts said that had been largely factored in.
Seoul shares closed down 0.4 percent after a batch of weak domestic and U.S. economic data deepened worries about the economy, but Hynix Semiconductor rallied 13 percent on hopes the chip industry has hit a bottom.
Australian shares finished 0.4 percent higher, reversing early losses, as National Australia Bank and Rio Tinto rebounded and gains in gold miners offered support.
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Hong Kong shares rose 0.9 percent, but HSBC Holdings tanked 2.9 percent as concerns over dividend cuts and recapitalisation continued to hound the bank. The blue-chip Hang Seng Index was among the worst performers in the region this month, topped only by a more than 10 percent slump on Tokyo's Nikkei, as investors shunned Chinese financial stocks amid stake selldowns by foreign investors.
Singapore's Straits Times Index was down over 1 percent, with financials leading the declines. DBS Group shed 3.1 percent and UOB was down 1.7 percent.