* Nikkei at 4-mth closing low; Asia energy, tech suffers
* U.S. dollar rallies, hits 2-month high vs euro
* Disappointment with policy actions drive risk aversion
* Trio of havens: U.S. Treasuries, dollar, gold
(Updates prices throughout)
By Kevin Plumberg
HONG KONG, Feb 17 (Reuters) - Asian stocks fell on Tuesday,
with Japan's Nikkei sinking to a near 4-month closing low,
while the U.S. dollar surged as investors scrambled for safety
from deteriorating global economic conditions and volatile
banks.
Major European stocks were expected to open as much as 0.4
percent lower, financial bookmakers said, after Moody's
Investors Service warned severe recessions in emerging Europe
will pressure financial strength ratings of some Western
European banks. []
Fiscal strains across Portugal, Ireland, Greece and Spain
gave dealers more incentive to push the euro to a two-month low
against the dollar and scoop up U.S. Treasuries and gold --
both viewed by investors as places of refuge during market
turmoil.
"The risk aversion trades are likely to keep making money
-- albeit amid volatility -- until new measures are unveiled by
governments and central banks in key economies," said Dariusz
Kowalczyk, chief investment strategist with SJS Markets in Hong
Kong, in a note.
"Judging by the insufficient policy response so far, the
near-term market outlook remains negative."
Countless economic stimulus packages and open promises to
take more action by policymakers have so far all been met with
disappointment by investors, with not even the $787 billion
rescue bill passed this week in Washington helping sentiment.
Exports across Asia have collapsed and the latest Reuters
Tankan poll of Japanese manufacturers shows confidence remains
mired near record lows. [].
Japan's Nikkei fell 1.35 percent, closing at the lowest
since October 2008, as financial shares such as banks and
property firms slid on continued credit worries.
Japanese Finance Minister Shoichi Nakagawa said on Tuesday
he would resign after being forced to deny he was drunk at a G7
news conference, dealing a fresh blow to unpopular Prime
Minister Taro Aso in an election year. The yen slipped on the
news, but did not faze stocks.
Shares of top lender Mitsubishi UFJ Financial Group
<8306.T> lost 4 percent, in the wake of a big loss at HBOS, a
unit of Britain's Lloyds <LLOY.L>.
Losses in the energy, technology and financial sectors
dragged the MSCI index of Asia-Pacific stocks excluding Japan
<.MIAPJ0000PUS> down 3.2 percent.
Hong Kong's Hang Seng index <> shed 3 percent, with
banks such as China Construction Bank <0939.HK> and HSBC
<0005.HK> under pressure, while South Korea's market <>
fell 4.1 percent.
U.S. stock futures <SPc1> fell 1.6 percent, indicating a
weak open on Wall Street after a holiday on Monday, ahead of
results from the world's largest retailer Wal-Mart Stores Inc
<WMT.N>.
Investors were awaiting news from General Motors Corp
<GM.N> and Chrysler LLC <CBS.UL>, which were expected to hand
in their restructuring plans by a Tuesday deadline, a
requirement after receiving $13.4 billion in U.S. government
aid.
"Investors are selling stocks not only in Japan but in
other Asian markets as they wait for restructuring plans from
GM and Chrysler. There's a view in the market that they might
not be able to submit it on time," said Soichiro Monji, chief
strategist at Daiwa SB Investments in Tokyo.
SCHIZOPHRENIC
The dollar shot higher as investors cut down risks and held
on to liquidity amid volatile global markets.
The yen, which has often gained during periods of
heightened market stress, slid against dollar and briefly
extended losses after Nakagawa said he would resign after
parliament passed budget bills. []
Heavy euro selling tripped automatic sell orders planted
just below $1.27 and the currency fell more than 1 percent to
about $1.2630 <EUR=>, its lowest since early December.
The dollar rose to around 92.75 yen <JPY=>, its strongest
since early January.
Emerging Asian currencies broadly weakened against the
dollar.
"We believe there is more to come as the schizophrenic gap
between rather resilient Asian currencies recently and ugly
economic data closes," said Sebastien Barbe, currency
strategist with Calyon in Hong Kong, in a note.
The renewed focus on safety funnelled investors into U.S.
government debt, pushing yields lower across maturities. The
benchmark 10-year yield <US10YT=RR> tumbled to 2.81 percent
from about 2.89 percent late on Friday.
The 2-year yield fell to 0.89 percent from 0.97 percent.
Japanese government bonds also rose on the back of the
rally in Treasuries, with the March 10-year future up by 0.38
point <2JGBv1>.
U.S. crude futures <CLc1> for March delivery fell to $36.76
a barrel, 75 cents off last Friday's settlement. London Brent
crude for April <LCOc1> rose 72 cents to $44 in thin trading.
The sharp declines in equity markets and rush to safety
sparked strong demand for gold. The spot market price climbed
to a seven-month high of $958.80 an ounce <XAU=>.
