* Deleveraging helps US dollar, hurts stocks and
commodities
* Lehman's losses keep focus on unstable financial sector
* MSCI Asia-ex Japan index at lowest since October 2006
By Kevin Plumberg
HONG KONG, Sept 11 (Reuters) - The U.S. dollar rose to a
one-year high against the euro on Thursday, pushed up by
overnight losses in crude oil and as heightened market
volatility convinced U.S. investors to bring overseas money
back home.
Asian stocks fell broadly, with Tokyo's Nikkei share
average <> retreating 1.3 percent to a six-month low and
the MSCI Asia Pacific ex-Japan index <.MIAPJ0000PUS> down 1.1
percent to its lowest since October 2006.
Bank stocks suffered bigger losses after U.S. investment
bank Lehman Brothers <LEH.N> posted a record quarterly loss of
$3.9 billion. The dismal results from Lehman, which is trying
to shed assets to stay alive, sent a message to investors that
the year-long global credit crisis will likely claim more
victims before ending. []
Indications of increased volatility in stock and bond
markets as well as economic deterioration in just about every
part of the world has led investors to cut back on overseas
risk in their portfolios, supporting the dollar.
"The market's direction points toward dollar buying," said
Hideaki Inoue, chief manager of forex trading at Mitsubishi UFJ
Trust Bank in Tokyo.
"What we are witnessing now is position adjustments that
are part of a bigger picture, one in which investors are
pulling back money from risk assets," Inoue said.
The euro briefly fell below $1.3950 <EUR=> to the lowest
since September 2007, with investors focused for now on rapidly
slowing economic growth outside of the United States.
However, the dollar fell against the yen, down 0.3 percent
to 107.47 yen <JPY=>. Against the yen, the euro tumbled 0.5
percent to 149.90 yen <EURJPY=>.
The dollar for the most part has been rallying since crude
oil prices peaked at $147.27 a barrel in mid July and then fell
sharply.
The U.S. currency received an added boost by the U.S.
government's takeover of Fannie Mae <FNM.N> and Freddie Mac
<FRE.N> at the weekend, which helped calm some fears of further
widespread bond market losses.
Still, worries about troubles at other financial
institutions continued to dog bank stocks. Shares of Mitsubishi
UFJ Financial Group <8306.T> fell 4 percent and Industrial and
Commercial Bank of China <1398.HK>, the biggest-earning bank
globally, was off 1 percent.
In Australia, the benchmark S&P/ASX 200 <> index fell
1.3 percent, led by shares of some of the country's top banks,
such as National Australia Bank <NAB.AX> and Commonwealth Bank
of Australia <CBA.AX>.
Hong Kong's Hang Seng index <> declined 0.8 percent,
down for a third day and heading toward a one-year low touched
on Friday.
The regional weakness put the MSCI all-country world index
<.MIWD00000PUS> on course for the ninth down day of the last
10. The index hit a two-year low on Wednesday.
The October U.S. light crude contract <CLc1> edged up 78
cents to $103.36 <CLc1> after hitting a five-month low on
Wednesday as the dollar rallied. Crude would need to trade
above $109 a barrel to break a steep downward trend in prices
that has held since July 14. []
The widespread liquidation of commodity-related trades also
hit the gold market as risk taking took a back seat to the need
for stability.
Gold <XAU=> briefly dropped to the lowest since October
2007 in the spot market of $748.60 an ounce after the dollar
rallied to a 1-year high against the euro, but bounced to
$754.10 an ounce.
"Investor interest has diminished because of the movement
of the U.S. dollar and the oil price," said David Moore,
analyst at Commonwealth Bank of Australia in Sydney.
The reduction in risk taking in just about every asset
class has been swift and definite and has been pushing up the
cost of insurance against credit defaults.
"We have entered a new phase of the credit cycle marked by
accelerated deleveraging. Herd recycling of risk through
commodities, currencies, rates, and equities is sponsoring
hyper volatility," said Brett Williams, credit analyst with BNP
Paribas in Hong Kong.
(Additional reporting by Shinichi Saoshiro in TOKYO and Lewa
Pardomuan in SINGAPORE)
(Editing by Kim Coghill)
