©Reuters – Asian stocks plunged on Friday, with Japan’s Nikkei down more than 10 percent, while the yen and U.S. Treasury debt prices rose, as panic set in after global efforts so far failed to unlock credit markets.
A synchronized cut in borrowing costs by central banks around the world this week was seen as too little, too late, and investors doubted a meeting of the Group of Seven rich nations later on Friday could achieve much, with fears growing that the global economy is headed toward recession.
U.S. government debt and the yen have become refuges from the worsening financial crisis that overnight knocked the U.S. S&P 500 stocks index down 7.6 percent to a 5-year low. But cash was ultimately king, with even Japanese government bonds being liquidated for funding.
Fears of a sharp slowdown in demand for raw materials from heavy consumers like China and the United States dragged oil prices down to a 12-month low below $83 a barrel.
“It’s impossible to predict the bottom, and technical analysis is meaningless as panic and fear overwhelm the markets,” said Jang Huh, managing director at Prudential Asset Management in Seoul.
The Nikkei share average was down 10.1 percent, bringing the week’s losses to more than 20 percent.