US Recession Fears Sink Asian Stocks, Japan Sheds 2%

Asian markets extended losses in the afternoon session Friday after disappointing U.S. economic data revived concerns about a recession in the world's top economy and bearish comments from former Fed chairman Alan Greenspan sank Wall Street.

Weaker-than-expected second-quarter growth and a rise in the number of Americans applying for jobless benefits soured sentiment on the Dow Thursday and left investors uneasy about the July payrolls report due later today.

This together with Greenspan's comments that the U.S. was “nowhere near the bottom” of the housing slump and was "right on the brink" of a recession, pushed the Dow to finish over 200 points down.

Crude oil fell about $2 in New York trade, ending the month at $124.08 a barrel. Oil has dropped nearly $16, or 11%, since the end of June. Oil continues to trade below the $124 level in the Asian session

Japan's Nikkei 225 Average tumbled 2.1 percent to hit a two-week closing low, dragged down by financials after two of Japan's largest banks posted sharp falls in core profitability, hurt by the downturn in global markets and a weakening domestic economy. NEC Corp plunged 16.5 percent to log its biggest one-day fall in 21 years, after the electronics maker posted a sharp fall in profit on sluggish sales of network equipment and mobile phones.

Seoul shares finished 1.3 percent lower, led down by exporters such as Hyundai Motor after disappointing U.S. economic data deepened worries about the world's largest economy, while Kumho Group shares tumbled on liquidity fears.

Australian shares fell 1.5 percent as Suncorp's warning of a steep drop in profit hit the financial sector, while revived worries that a U.S. recession will dent demand for commodities hurt resource firms.

Hong Kong's Hang Seng rebounded to finish 0.6 percent higher after Chinese President Hu Jintao indicated the country's economic policy was shifting towards sustaining growth. China's Shanghai Composite Index ended 0.9 percent up.

Singapore's Straits Times Index shed 0.8 percent. Shares of CapitaLand slid over 2 percent after it posted a 44 percent fall in quarterly net profithit by lower property sales and the absence of one-off gains.