Asian stocks headed for their biggest weekly fall in nearly a decade today as credit fears drove investors away from risky trades despite a late turnaround on Wall Street.
Industrial metal prices fell, and safe-haven government bonds extended gains on worries that financial market turmoil will hurt global growth and further damage investor confidence.
MSCI's measure of Asia Pacific stocks excluding Japan fell 2.7 per cent earlier this morning to a fresh four-and-a-half month low.
The index has lost 10.8 per cent on the week - its worst weekly performance since January 1998, when it fell 12.4 per cent. It is now down almost 20 per cent from its July 24th record high, and year-to-date gains have dwindled to just over 2 per cent.
Tokyo's Nikkei average dropped 5.4 per cent to its lowest close in a year and was down about 9 per cent this week. For the year, the Nikkei has fallen 11 per cent.
Major exporters such as Honda, Canon, and Toyota Motor all lost more than 7 per cent, pressured by a stronger yen and worries about slower global growth.