Asian markets turned negative late Thursday with the U.S. dollar extending its rally against the yen as mounting economic damage and prolonged political uncertainty in Japan tarnish the yen's safe haven reputation.
The price action in Asia lacked firm conviction as regional exports continue to slump amid the global slowdown and corporate earnings prospects recede rapidly.
Further poor data also dragged on stocks, with January home sales in the U.S. falling to a 12-year low, while Germany's economy contracted a record 2.1 percent in the fourth quarter of 2008.
The dollar was up against the yen , after touching a 3-month high around 97.88 yen earlier in the morning. The Australian dollar strengthened to a near two-month high against the yen , at 63.69 yen. Crude oil prices are trading above $42 a barrel, after a report showed a sharp drop in U.S. government industries.
The Nikkei 225 Average ended nearly flat after briefly turning negative on a spate of profit-taking as Advantest tumbled nearly 13 percent after warning of a record loss. Drugmaker Daiichi Sankyo sank over 9 percent after U.S. regulators said Indian generic drugmaker Ranbaxy Laboratories, in which Daiichi holds a controlling stake, had falsified data.
South Korea's KOSPI closed down 1 percent, led lower by Kia Motors and LG Display, but comments by the vice finance minister on domestic foreign exchange liquidity supported sentiment.
Australia's S&P/ASX 200 Index finished half a percent higher as Woodside Petroleum led an
advance in oil producers that helped offset the impact of company earnings downgrades. Telstra shed 2.4 percent. The company dropped its earnings before interest and tax growth forecast to a range of 3-5 percent, from 6-8 percent before and also said its chief executive Sol Trujillo would stand down.
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Hong Kong shares were 0.8 percent lower as blue chips were sold down ahead of the index futures expiry. China Mobile led the losses. Shares in Asia's largest wireless carrier, which is also the heaviest weighted stock on the Hang Seng, dropped 2.8 percent.
Singapore's Straits Times Index closed flat. The island state issued revised GDP estimates for 2008 which showed the economy contracted by 16.4 percentin the fourth quarter on an annualized, seasonally adjusted quarter-on-quarter basis.
China's Shanghai Composite Index closed 3.9 percent lower as banks, which had led a market rebound Wednesday, were mixed. Merchants Bank extended Wednesday's sharp rise in very heavy trade. Auto shares were weak, slipping back after some rose sharply in speculative trade on Wednesday when the official Shanghai Securities News said China, planning to restructure the sector, had chosen four auto-making groups to lead large-scale mergers and four other groups to pursue regional mergers.