Most Asian stocks fell on Friday in the face of a rapidly slowing global economy, which dragged oil briefly below $60 a barrel, though hopes for more policy action to support growth brought markets back from their lows.
Major European share markets were expected to open as much as 1 percent lower, according to financial bookmakers, ahead of the lastest U.S. payrolls report that is widely expected to show the world's largest economy continuing to bleed jobs. The median forecast of economists polled by Reuters last week is for payrolls losses of 200,000 in October.
No industry was considered a safe bet yet and investors have found few consistent havens except for the yen and some government bonds, with the financial crisis expected to see the world's developed economies headed for the first full-year contraction since World War Two.
Toyota Motor Corp shares dropped 9.2 percent after the world's top car maker cut in half its net profit forecast for fiscal year 2008 because of dwindling demand.
Central banks met limited success as they scrambled to get ahead of deteriorating conditions, though their unconventional and persistent actions won some applause.
The Bank of Korea cut interest rates for the third time in a month, following half-point cuts on Thursday from the European Central Bank and the Swiss National Bank.
The Bank of England also slashed its key rate by 1.5 percentage points on Thursday, much more than the market expected, bringing borrowing costs down to the lowest since the 1950s.
"The rate cuts send a signal on how committed the central banks are in reviving the global economy," said Jackson Wong, investment manager at Tanrich Securities in Hong Kong. "They inspire some confidence among investors."
The MSCI index of Asia-Pacific stocks outside of Japan slipped 0.4 percent, a small victory after falling nearly 3 percent earlier.
However, the index was set to post a small decline on the week. It had risen just four weeks in almost six months and has lost about 55 percent this year in what is shaping up to be the worst bear market the region has ever experienced.
A MODEST REASON TO CHEER
Japan's Nikkei share average pared losses to end down 3.6 percent. For a second day, major exporters such as Canon Inc and Honda Motor Co, were among the biggest drags on the index.
South Korean stocks also fought back from early losses, climbing 3.9 percent, after the central bank rate cut boosted bank stocks and exporter shares rose.
Hong Kong's Hang Seng index was barely changed in volatile trade, as investors flipped back and forth between optimism about more government efforts to bolster growth and expectations for more earnings weakness.
Hong Kong Exchanges & Clearing stock, down 5.5 percent, was the top drag because of grim expectations the company's quarterly results next week will reflect poor market conditions.
U.S. President-elect Barack Obama will hold his first news conference since his victory earlier this week, and some in the market were bracing for hints at policy direction to stem the financial crisis.
"Yesterday people were worried about the U.S. but today they are looking forward to seeing if he'll announce something that will help the market," said Andrew Orchard, Asia-Pacific equities analyst with Royal Bank of Scotland in Hong Kong.
STOCK FALLS BOOST YEN
The yen continued to follow around volatility in global equity markets this year. The yen has benefitted from a combination of Japanese investors closing out overseas trades and bringing money back home as well as global investors finding comfort in Japan's external surplus.
The euro mostly steady against the yen from late U.S. trading on Thursday at 124.05 yen after falling as low as 122.40 yen.
The U.S. dollar was down slightly at 97.44 yen, compared with where it ended late on Thursday at 97.73 yen
The euro traded at $1.2735, also little changed.
The feverish reduction of risk in investors' portfolios and on bank balance sheets, a process broadly described as deleveraging, has been the main factor driving down global equities, emerging market asset prices and commodities.
Commodity prices remained under pressure, with Shanghai copper futures tumbling by their 5 percent daily limit after sharp falls in London copper prices overnight.
The December U.S. crude oil futures contract meanwhile was largely unchanged at $61.06 a barrel after earlier touching a year-and-a-half low of $59.97 on concerns about the global slowdown hitting demand.
Analysts with State Street Global Markets said institutional investors have been extremely risk averse for five straight months, according to data derived from 15 percent of the world's tradeable assets.
However, with borrowing rates between banks falling, inflation rates mostly coming down and liquidity conditions among emerging markets improving, State Street found a silver lining.
"For the first time since the credit crunch bit there is a chance that the authorities are getting ahead of events. This is one reason to be cheerful," they said in a note.
