* Central banks step up pace of rate cuts
* Toyota shares tumble 12 pct after slashing outlook
* Yen climbs as investors seek relative safety
(Repeats to additional subscribers with no change to text)
(Updates prices, adds detail)
By Kevin Plumberg
HONG KONG, Nov 7 (Reuters) - Asian stocks fell for a third
straight day and oil prices slipped to a 1-1/2-year low below
$60 a barrel on Friday in the face of a rapidly slowing global
economy, though aggressive policy changes brought markets back
from freefall.
Still, 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 slump 12 percent
after the world's top car maker cut in half its net profit
forecast for fiscal year 2008 because of dwindling demand.
[]
Central banks met limited success as they scrambled to get
ahead of deteriorating conditions. The Bank of Korea cut
interest rates for the third time in a month, following
half-point cuts on Thursday from the European Central Bank and
the Swiss National Bank. []
The Bank of England spooked investors by slashing its key
rate by 1.5 percentage points, much more than the market
expected, 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.
NIKKEI LEADS LOWER
Japan's Nikkei share average <> led the region lower,
dropping 4.4 percent. For a second day, exporters with good
overseas brand recognition, like Canon Inc <7751.T> and Honda
Motor Co <7267.T>, were clobbered.
The MSCI index of Asia-Pacific stocks excluding Japan
<.MIAPJ0000PUS> fell 2.7 percent and was heading for another
weekly loss. The index has posted a weekly rise just four times
in almost six months and has lost about 55 percent this year in
what is shaping up to be the worst bear market the region has
ever experienced.
South Korean stocks <> fought back from early losses,
edging up 0.8 percent, after the central bank rate cut boosted
bank stocks.
Hong Kong's Hang Seng index <> fell 1.3 percent in
volatile trade, with Hong Kong Exchanges & Clearing <0388.HK>
stock one of the biggest drags because of grim expectations the
company's quarterly results next week will reflect poor market
conditions.
U.S. stocks overnight posted their worst two-day slide
since October 1987, though S&P 500 futures <SPc1> ticked higher
as investors awaited the latest U.S. payroll report due on
Friday.
A REASON FOR CHEER?
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 in Tokyo.
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 0.4 percent against the yen from late U.S.
trading on Thursday to 123.75 yen <EURJPY=R> but rose 0.1
percent against the dollar to $1.2730 <EUR=>.
The U.S. dollar fell 0.5 percent against the yen to 97.30
yen <JPY=>.
The feverish reduction of risk in investors' portfolios and
on bank balance sheets, a process broadly described as
deleveraging, has been the main factor driving down global
equities, emerging market asset prices and commodities.
Commodity prices remained under pressure, with Shanghai
copper futures tumbling by their 5 percent daily limit after
sharp falls in London copper prices overnight.
The December U.S. crude oil futures contract <CLc1>
meanwhile was largely unchanged at $61.06 a barrel after
earlier hitting after hitting a low of $59.97 on concerns about
the global slowdown hitting demand.
Analysts with State Street Global Markets said
institutional investors have been extremely risk averse for
five straight months, according to data derived from 15 percent
of the world's tradeable assets.
However, with borrowing rates between banks falling,
inflation rates mostly coming down and liquidity conditions
among emerging markets improving, State Street found a silver
lining.
"For the first time since the credit crunch bit there is a
chance that the authorities are getting ahead of events. This
is one reason to be cheerful," they said in a note.
(Additional reporting by Masayuki Kitano in TOKYO; Editing
by Lincoln Feast)
