* Central banks step up pace of rate cuts, fraying nerves
* Toyota stock under water with sell orders
* Yen climbs as investors seek relative safety
By Kevin Plumberg
HONG KONG, Nov 7 (Reuters) - Asian stocks fell sharply for
a third day and commodity prices tumbled on Friday, as layoffs
and corporate profit warnings piled up in the face of a rapidly
slowing global economy.
U.S. crude oil futures fell to a 1-1/2-year low below $60 a
barrel on expectations for a drastic pullback in energy
demand.
No industry was considered a safe bet and investors found few
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 II.
Toyota Motor Corp <7203.T> saw its stock overwhelmed with
sell orders by a factor of eight to one after the world's top
car maker cut in half its net profit forecast for fiscal year
2008 because of dwindling demand. []
The Bank of Korea cut interest rates for the third time in
a month, joining other central banks that are scrambling to get
ahead of deteriorating conditions. []
The Bank of England spooked investors on Thursday by
slashing its key rate by 1.5 percentage points, bringing
borrowing costs down to the lowest since the 1950s.
[]
"The dramatic moves by the central banks shows that the
depth of the economic problems in the global economy and the
implications of economic contraction on the inflation outlook
is now being recognised fully by policymakers," Ashley Davies,
currency strategist with UBS in Singapore, said in a note.
Japan's Nikkei share average <> led the region lower,
dropping 5.85 percent. For a second day, exporters with good
overseas brand recognition, like Canon Inc <7751.T> and Honda
Motor Co <7267.T>, were clobbered.
Toyota stock was halted but was bid down 13 percent from
its close on Thursday.
The MSCI index of Asia-Pacific stocks excluding Japan
<.MIAPJ0000PUS> fell 3.6 percent in early trade but could
accelerate its decline as other markets open.
The gauge has lost about 55 percent this year in what is
shaping up to be the worst bear market the region has ever
experienced.
U.S. stocks overnight posted their worst two-day slide
since October 1987, though S&P 500 futures were mostly
unchanged as investors awaited the latest U.S. payroll report
due on Friday.
The median forecast of economists polled by Reuters last
week has payrolls losses of 200,000 in October, though Goldman
Sachs this week increased its expectation for job losses to
300,000.
The sharp decline in global equity markets has pushed up
the yen, which has benefited 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 yen tends to attract buying because of the weakness in
economies around the world," said Takahide Nagasaki, chief
foreign exchange strategist for Daiwa Securities SMBC.
Unless the global economy improves, it is hard to expect
investors to actively sell the low-yielding yen to invest
elsewhere, Nagasaki said.
The euro fell 1.1 percent against the yen from late U.S.
trading on Thursday to 122.97 yen <EURJPY=R> and dipped 0.3
percent against the dollar to $1.2676 <EUR=>.
The U.S. dollar fell 0.8 percent against the yen to 96.97
yen <JPY=>.
The December U.S. crude oil futures contract <CLc1>
meanwhile was down 27 cents to $60.50 a barrel after hitting a
low of $59.97.
(Additional reporting by Masayuki Kitano in TOKYO, editing
by Dhara Ranasinghe))
