(Adds China CPI, updates prices)
By Rafael Nam
HONG KONG, March 11 (Reuters) - Asian stocks headed for a
third session of losses on Tuesday, hovering around seven-week
lows, as a looming U.S. recession is expected to slow economies
worldwide and deepen credit-related problems in the financial
sector.
Concerns that inflation was getting out of control also
nagged across Asia. China, a top export destination for much of
the region, said its consumer inflation jumped to an 11-year
high last month, hitting shares in Shanghai <> and Hong
Kong <>.
Oil, seen as a safe haven against inflation and a weak
dollar, held steady after hitting a record above $108 a barrel
on Monday, while gold was range-bound, though below $975 an
ounce.
The dollar traded near an eight-year low against the yen on
expectations for aggressive cuts in U.S. interest rates, but
some Asian currencies such as the South Korean won <KRW=>
weakened against the dollar as investors shun riskier assets.
"Concerns about inflation are very strong. Hedge funds are
selling stocks and buying commodities, especially in oil and
gold, because the U.S. dollar is weakening," said Takeda
Makoto, an analyst at Bansei Securities in Japan.
The MSCI measure of Asian stocks outside Japan
<.MIAPJ0000PUS> was down more than 1 percent at 0410 GMT, after
falling more than 2 percent in each of the previous two
sessions.
Japan's Nikkei 225 index <> was down 0.3 percent,
after earlier dropping as much as 1.4 percent, shares in
Australia <> fell 1.4 percent, and Hong Kong <> lost
1.2 percent.
Shares in China were down 0.7 percent, but markets in South
Korea <> and Taiwan <> edged slightly higher.
INFLATION RISK
Exporters, such as Japan's Canon Inc <7751.T>, extended
their losing streak on expectations that Asia will fall under
the sway of a U.S. economy that many believe is either in or
near a recession.
Financial companies such as South Korea's Kookmin Bank
<060000.KS> have suffered from the fall-out of subprime and
credit-related writedowns worldwide.
Speculation that Bear Stearns Co <BSC.N> was facing a cash
crunch contributed to Wall Street falls on Monday, even though
the U.S. investment bank dismissed the talk as "totally
ridiculous". []
Central bankers across Asia are bracing for a year of tough
decisions as a global economic slowdown coincides with record
commodity and food product prices.
China said its February consumer inflation jumped to 8.7
percent, above economists' expectations for an 8 percent
increase. []
"There's growing concern that China's inflation is getting
out of control," said Li Huiyong, an analyst at Shenyn & Wanguo
Securities in Shanghai.
The nominee for governor of the Bank of Japan, Toshiro
Muto, said on Tuesday the world's second-biggest economy was at
a "critical" stage, as risks to the global economy rise, while
Japan also faces higher raw materials and energy costs.
[]
Countries across the region are already reporting slowing
growth in overseas sales. Philippines said its exports rose 6.4
percent in January from a year ago, versus a 21.4 percent
annual climb in December. []
"I think we are seeing this throughout, that U.S. recession
is slowing down all the exports of Asian economies," said
Kenneth Chen, chief analyst at Informa Global Markets. "I think
we are going to see this continuing for the next couple of
months."
Japanese government bond futures tested new 2-
