* Central bank rate cuts increase amid economic instability
* Toyota shares tumble 9 pct after slashing outlook
* Yen climbs as investors seek relative safety, eye jobs
data
(Recasts, updates prices, adds quotes)
By Kevin Plumberg
HONG KONG, Nov 7 (Reuters) - Most Asian stocks fell on
Friday in the face of a rapidly slowing global economy, which
dragged oil briefly below $60 a barrel, though hopes for more
policy action to support growth brought markets back from their
lows.
Major European share markets were expected to open as much
as 1 percent lower, according to financial bookmakers, ahead of
the lastest U.S. payrolls report that is widely expected to
show the world's largest economy continuing to bleed jobs. The
median forecast of economists polled by Reuters last week is
for payrolls losses of 200,000 in October. []
No industry was considered a safe bet yet and investors
have found few consistent 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 Two. []
Toyota Motor Corp <7203.T> shares dropped 9.2 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, though their unconventional
and persistent actions won some applause.
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 also slashed its key rate by 1.5
percentage points on Thursday, much more than the market
expected, bringing borrowing costs down to the lowest since the
1950s. []
"The rate cuts send a signal on how committed the central
banks are in reviving the global economy," said Jackson Wong,
investment manager at Tanrich Securities in Hong Kong. "They
inspire some confidence among investors."
The MSCI index of Asia-Pacific stocks outside of Japan
<.MIAPJ0000PUS> slipped 0.4 percent, a small victory after
falling nearly 3 percent earlier.
However, the index was set to post a small decline on the
week. It had risen just four weeks 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.
A MODEST REASON TO CHEER
Japan's Nikkei share average <> pared losses to end
down 3.6 percent. For a second day, major exporters such as
Canon Inc <7751.T> and Honda Motor Co <7267.T>, were among the
biggest drags on the index.
South Korean stocks <> also fought back from early
losses, climbing 3.9 percent, after the central bank rate cut
boosted bank stocks and exporter shares rose.
Hong Kong's Hang Seng index <> was barely changed in
volatile trade, as investors flipped back and forth between
optimism about more government efforts to bolster growth and
expectations for more earnings weakness.
Hong Kong Exchanges & Clearing <0388.HK> stock, down 5.5
percent, was the top drag because of grim expectations the
company's quarterly results next week will reflect poor market
conditions.
U.S. President-elect Barack Obama will hold his first news
conference since his victory earlier this week, and some in the
market were bracing for hints at policy direction to stem the
financial crisis.
"Yesterday people were worried about the U.S. but today
they are looking forward to seeing if he'll announce something
that will help the market," said Andrew Orchard, Asia-Pacific
equities analyst with Royal Bank of Scotland in Hong Kong.
STOCK FALLS BOOST YEN
The yen continued to follow around volatility in global
equity markets this year. The yen has benefitted 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 euro mostly steady against the yen from late U.S.
trading on Thursday at 124.05 yen <EURJPY=R> after falling as
low as 122.40 yen.
The U.S. dollar was down slightly at 97.44 yen, compared
with where it ended late on Thursday at 97.73 yen <JPY=>.
The euro <EUR=> traded at $1.2735, also little changed.
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 touching a year-and-a-half 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 Jun Ebias in HONG KONG; Editing by
Lincoln Feast)
