Asia stocks Markets hit new lows as crisis deepens

ASIAN stocks fell about 4 per cent, down for a fifth consecutive day, and government bond prices rose on Wednesday as fears of a looming global recession grew with no sign of a coordinated response or an end to the worsening financial meltdown.

The yen climbed as investors clung to anything resembling stability after Federal Reserve Chairman Ben Bernanke warned turmoil in markets could cause US economic activity to be subdued into 2009 and signalled a readiness to cut interest rates.

'The deteriorating outlook for the economy and the deepening financial crisis are pushing fears to their limit,' said Mr Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management in Japan.

Tokyo's Nikkei share average dropped 4.5 per cent, hitting a fresh 5-year low, taking losses for the past five days to 15 per cent.

Shares of Toyota Motor Corp fell more than 5 per cent after a report the car maker's annual operating profit will likely fall around 40 per cent in the year to next March.

Australia's S&P/ASX 200 index slid 3.5 per cent, a day after rallying on a much larger-than-expected interest rate cut by the country?s central bank.

The MSCI Asia-Pacific index of stocks outside of Japan was down 4.4 per cent to a near 3-year low.

The index has fallen a staggering 25 per cent in a month and 46 per cent so far this year, underperforming the MSCI all-country world index, which has fallen 36 per cent year-to-date.

Hong Kong's Hang Seng index fell 5.4 per cent to a 27-month low after a market holiday on Tuesday.