* Asian shares edge lower, reverse earlier gains
* Euro, sterling vulnerable; hefty rate cuts seen in Europe
* Oil prices slump more than $1 to near four-year lows
* U.S. Treasury 10-yr yield hits lowest in five decades
(Updates with latest Asian prices, European outlook)
By Rafael Nam
HONG KONG, Dec 4 (Reuters) - Asian shares fell on Thursday
as more bad news piled up for the global economy, while the
dollar and yen steadied as central banks in the UK and Europe
were set to cut interest rates to their lowest in years.
European shares were set to open slightly lower ahead of
the central bank decisions, with the focus also on Swiss Bank
Credit Suisse <CSGN.VX>, which announced a net loss of about 3
billion Swiss francs ($2.5 billion) in the two months to
end-November and cut another 5,300 jobs. []
Despite a flurry of government measures in recent months
aimed at stabilising markets, investor fears of further losses
persist.
A corporate survey in Japan pointed on Thursday to a deeper
recession than first thought, while Australia's vehicle sales
slumped in November, in the latest signals that the global
economic downturn is sparing few corners of the world.
[]
Oil prices fell to below $46 a barrel to almost four-year
lows, as investors opt for safer-havens. The U.S. Treasury
10-year yield hit its lowest in five decades, helped as well by
expectations for more U.S. purchases of government debt.
Central banks are responding to weak economic growth by
cutting rates aggressively, with the European Central Bank and
the Bank of England on Thursday expected to join countries such
as Thailand and New Zealand in slashing borrowing
costs.[]
Whether they prove effective remains in question.
"The market may have become used to extremely weak economic
numbers and are now wanting to see how dramatic policy actions
taken across the globe, including monetary easing, will impact
the economy and the stock markets," said Etsuko Yamashita,
chief economist at Sumitomo Mitsui Bank, in Japan.
The MSCI index of Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> fell 0.6 percent as of 0650 GMT, turning around
after earlier gains of as much as 1.2 percent.
The MSCI index has advanced more than 10 percent since
hitting a five-year low on Nov. 21, but is still down 59
percent for the year as of Wednesday's close.
Although Wall Street shares rose on Wednesday for a second
session on the back of defensive stocks seen as riding out a
recession, data showed large job losses among U.S. employers
and a slumping service sector, suggesting the worst may not be
over for the world's largest economy. []
Other economies worldwide are faring no better, prompting
central banks to cut rates aggressively. Thailand on Wednesday
cut its benchmark by a full percentage point, while New Zealand
slashed them on Thursday by a record 150 basis points to their
lowest in five years. See []
Policy makers are also taking additional steps to stabilise
their financial sectors. South Korea and China on Wednesday
said they would pump more funds into their financial systems to
ensure additional liquidity. [] and []
The BOE could opt for a full percentage point cut that
would bring rates to their lowest in more than half a century.
[]
The size of the interest rate cuts being considered are an
indication of the weakness of the global economies.
The euro fell 0.3 percent from late New York trade to
$1.2676 <EUR=>, while sterling was down 0.4 percent at $1.4730
<GBP=D4>.
Against the Japanese yen, the dollar was down 0.3 percent
at 93.07 yen <JPY=>, while the euro slid 0.5 percent to 117.96
yen <EURJPY=R>.
The yen has been the strongest among the world's major
currencies despite the country's sputtering economy and
Japanese investors' having been steady buyers of overseas
assets.
Japanese investors have been net buyers of foreign stocks
for the past 10 weeks, snapping up a total 2.87 trillion yen
($30.77 billion), government data showed on Thursday. []
Oil prices lost $1.16 to $45.63 a barrel <CLc1>, continuing
a slump this week that has seen prices hit their lowest in
almost four years.
Gold <XAU=> also slipped as the dollar firmed against the
euro, trading at $766.50, down about $6 from New York's
notional close. Other metals such as Platinum <XPT=> also
retreated.
Low-risk investments such as U.S. Treasuries are
benefitting from worldwide risk aversion.
The benchmark 10-year note yield <US10YT=RR> fell to 2.616
percent, down from 2.655 percent in late New York trade on
Wednesday, having hit its lowest in five decades. The yield has
dropped more than 100 basis points in the past month amid the
intensifying fears about the global economy.
For the latest stories on the global financial crisis,
click on []
(Additional reporting by Satomi Noguchi in TOKYO and Denny
Thomas in SYDNEY; Editing by Dhara Ranasinghe)
