* Japan joins Hong Kong, Singapore, Germany in recession
club
* U.S. dollar benefits from flight to safety and liquidity
* Oil slips towards 22-mth low on demand fears
By Kevin Plumberg
HONG KONG, Nov 17 (Reuters) - Most Asian stocks fell on
Monday as hopes for substantial global financial policy changes
faded after a weekend meeting of world leaders failed to
produce concrete measures, causing investors to continue to
seek safety in U.S. dollars.
Oil prices also sank, slipping below $56 a barrel to within
striking distance of last week's 22-month low after
policymakers from both emerging and developed economies who met
in Washington chose to leave individual governments to tend
their own backyards. Many are struggling to cope with the worst
financial crisis in 80 years, with Japan joining a growing list
of economies sliding into recessions.
Financial markets and economies remained locked in a
vicious circle, with weakness in one affecting the other.
Investors for their part remained focussed on slashing any
form of risk in their portfolios and hoping more interest rate
cuts that markets are betting on will eventually improve
sentiment.
"It is possible for the negative growth to continue in the
second half of the fiscal year," said Tatsushi Shikano, senior
economist with Mitsubishi UFJ Securities in Tokyo, about
prospects for the Japanese economy. "The economy abroad,
especially the United States, is slowing down and it is likely
that exports will remain weak."
The MSCI index of Asia-Pacific stocks outside of Japan
<.MIAPJ0000PUS> fell 1.6 percent, extending last week's 9.7
drop. Year-to-date losses have piled up to around 57 percent.
Tokyo's Nikkei share average <> recovered slightly, up
1.2 percent, as the yen fell and as long-term investors snapped
up cheap stocks.
Sumitomo Mitsui Financial Group stock <8316.T> fell 1.9
percent after Japan's third-largest bank posted on Friday a 51
percent decline in quarterly profit because of bad loans.
Hong Kong's Hang Seng index <> slipped 0.6 percent in
choppy trade, with shares of Hong Kong Exchanges & Clearing
<0388.HK> the biggest percentage loser as investors expected
withering volumes to hurt the company's bottom line.
Airline stocks such as Air China <601111.SS><0753.HK>,
China Eastern Airlines <600115.SS> <0670.HK> and China Southern
Airlines <600029.SS> <1055.HK> rallied on hopes they will get
government cash injections to cope with high costs and weak
demand. []
The yen cut its gains against the euro and the U.S. dollar
after a report showed Japan's gross domestic product shrank by
0.1 percent in the July-to-September period and government
officials said the situation could worsen further.
However, with the process of widespread risk reduction
still very much intact, dealers did not expect the yen to stay
down for long.
The U.S. dollar slipped 0.1 percent to 96.94 yen <JPY=>,
and the euro was off 0.4 percent to 121.79 yen <EURJPY=>.
U.S. light crude for December delivery <CLc1> fell $1.28 to
$55.76 a barrel, near the $54.67 a barrel low it hit on
Thursday, its weakest since January 2007.
"G20 leaders may have urged fast action to deal with the
global financial crisis, but concern over the weakened
international economic outlook still weighs heavily," said
David Moore, a commodities strategist at the Commonwealth Bank
of Australia.
The Group of 20 world leaders agreed Saturday to a raft of
fiscal and monetary steps to rescue the global economy, but it
was left to individual governments to tailor their response to
their particular circumstances.
(Additional reporting by Fayen Wong in PERTH and Fang Yan in
SHANGHAI; Editing by Lincoln Feast)
