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El tiempo: Consulta la previsión para tu ciudadBy Eric Burroughs
HONG KONG (Reuters) - Asian stocks fell more than 1 percent on Wednesday and the yen rose, with risk-averse investors fretting about the deepening damage to corporate profits and consumer spending despite a late rally on Wall Street.
Market players were also spooked after U.S. automakers gave a dire warning to lawmakers about their outlook while pleading for $25 billion of bailout funds from Congress.
Oil was steady at $54.34, near a 22-month low, on mounting worries about a deep global economic recession, highlighted by data overnight showing confidence at U.S. home builders plunging to a record low.
Japan's Nikkei average <.N225> shed 1.8 percent, driven in part by falling bank shares after No. 1 Mitsubishi UFJ Financial Group <8306.T> suffered a 61 percent drop in quarterly profit and a report said Sumitomo Mitsui Financial Group <8316.T> aimed to raise $4.2 billion in capital.
The MSCI index of Asia-Pacific stocks outside of Japan <.MIAPJ0000PUS> dropped 1.7 percent and was back near a four-and-a-half-year low hit last month. Overnight the U.S. S&P 500 <.SPX> gained 1 percent.
Troubles plaguing the banking system have yet to abate despite the efforts of central banks to get credit flowing again and problems have now spread to the real economy, leading to recessions in Japan, Europe and elsewhere.
Citigroup's
The U.S. housing market collapse at the heart of the crisis showed signs of deteriorating further, with the National Association of Home Builders index plunging to a record low of 9 in November. At its peak in 2005, the index reached 72.
"It confirms suspicions of another serious downleg in housing being underway and feeding into an already ugly recession," said Jan Lambregts, head of Asia research at Rabobank in Hong Kong.
EMERGING FX HIT
The South Korean won hit a three-week low and the KOSPI index <.KS11> shed 3.6 percent as market players have kept shedding riskier assets in stocks and emerging markets to minimize losses as year-end approaches.
The weakness in emerging market currencies knocked the Philippine peso down and led to suspected purchases by the country's central bank to prop it up, while the Indonesian rupiah slid to a seven-year low.
Australia's benchmark S&P/ASX 200 <.AXJO> shed 1.4 percent on a drop in non-financial shares after authorities lifted a ban on short selling, hitting companies such as supermarket chain Woolworths
The yen climbed as falling stocks spurred selling of higher-yielding currencies as investors shifted funds into the relative safety of the Japanese currency as well as the dollar.
The dollar dipped 0.4 percent from U.S. trade to 96.55 yen, while the euro was steady at $1.2616.
The dollar index, a gauge of its performance against a basket of six major currencies, was a touch higher at 87.158 and held near a 2-1/2-year peak struck last week.
The dollar has been propelled higher by the scramble among banks for dollar funding, as well as portfolio managers and hedge funds dumping assets and boosting cash holdings as they face investor redemptions.
Falling stocks gave a boost to safe-haven government bonds. Japanese government bond futures edged up 0.16 point to 138.77, near a five-week high hit the previous day.
U.S. Treasuries were up slightly, with the two-year yield falling 2 basis points to 1.1217 percent -- back near a record low of 1.072 percent touched in 2003 when the Federal Reserve last slashed rates down to 1 percent.
The Fed is widely expected to cut rates to 0.5 percent in December, what would be the lowest level since the 1950s, as it attempts to revive the economy.
(Editing by Lincoln Feast)
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