Sick yen piles on torment for Asia

Sick yen piles on torment for Asia

SINGAPORE (Reuters): Asia's markets took another dive
yesterday, as nerves over the weak yen and its impact on regional
economies swept trading floors for the second straight day.

The dollar rose above 142 yen in late Tokyo trade, as dealers
reacted to signs that the world's leading economies were not
about to intervene on the Japanese currency's behalf. It later
fell back to around 141.30/40.

As on Wednesday, the main fear on Asian markets was that the
yen's fall would drag regional currencies lower and eventually
push China into devaluing its yuan currency.

Despite analysts' belief that such a move was unlikely in the
near term and Chinese statements ruling it out, markets still
quaked at the prospect.

Japanese shares slumped over two percent in line with the yen
and on growing fears of renewed economic upheavals in Asia, while
Hong Kong stocks ended more than one percent down after paring
heavy early losses.

Manila shares took the region's biggest hammering, falling
nearly five percent, and most regional currencies wilted.

Shares in Singapore, South Korea and Indonesia provided some
relief, but traders put the gains down mostly to rebounds after
Wednesday losses.

Poor regional sentiment rebounded on Tokyo markets with a
vengeance, with banking shares hit hard by concerns the
turbulence in Asia would add to their already-heavy load of bad
loans, brokers said.

Tokyo's key 225-share Nikkei average lost 325.22 points, or
2.12 percent, to close at 15,014.04.

"The Japanese stock market suffered psychological damage from
Asia," said Ritsu Matsushita, director at the asset management
department of Invesco Asset Management (Japan) Ltd.

Hong Kong shares followed up a near five-percent tumble on
Wednesday with a fall of 1.17 percent yesterday, as bargain-
hunters helped the market claw back big early losses. The Hang
Seng index dropped 93.30 points to 7,886.07.

Australian markets were rocked again by Asia nerves, but the
embattled local dollar managed to bounce above 59 U.S. cents
after hitting a 15-year low of 0.5824/30 on Wednesday.

But Sydney stocks fell, losing 1.32 percent on fears that
official interest rates would be hiked.

Late buying linked with arbitrage trading helped the South
Korean stock market reverse course to close higher yesterday,
brokers said.

The Korea Stock Exchange composite stock price index added
1.28 percent, or 4.16 points, to 328.70.

Manila stocks plunged more than four percent on fears of a
regional currency meltdown and the Philippine peso sank to 40.24
to the dollar. The main share index fell 88.85 points to settle
at 1,829.02.

Southeast Asian markets had a mixed day, but the outlook
remained generally grim, dealers said.

Thailand's SET index ended off 2.80 percent, or 8.18 points,
at 283.92, as the bleak regional mood hit commercial and building
stocks.

Singapore shares ended higher after a week of selling. After
hitting a low of 1,048.52 in the morning, the Straits Times
Industrials Index closed at 1,086.83, up 1.78 percent, or 19.02
points.

Malaysian shares ended 1.4 percent down on regional woes,
while Jakarta shares were helped up by foreign buying to close
0.85 percent higher.