Asian stocks mostly down on European debt woes

The euro was off last week's eight-month lows in Asian trade but was still being sold in favor of the dollar as European fiscal problems continue to burden dealers.

Fears have grown that debt-ridden countries such as Greece, Spain and Portugal may be unable to restore stability to their public finances, having spent heavily to combat recession during the global meltdown.

“The market's biggest concern is the European fiscal situation, and this problem won't be solved any time soon,” Nikko Cordial senior strategist Tsuyoshi Kawata told Dow Jones Newswires.

The euro stood at 1.3626 dollars in Tokyo afternoon trade, after sliding to as low as 1.3586 in New York late Friday. The euro dropped to 121.65 yen from 122.01. The dollar edged up to 89.32 yen from 89.20.

Dealers in Asia were unimpressed by remarks from eurozone finance officials at G-7 talks in Canada on Greece's efforts to cut its public debt of more than 294 billion euros (412 billion dollars).

French Economy Minister Christine Lagarde had said: “The European members of the G-7 have confirmed to the other partners of the G-7 the substance and the significance of the (debt-reduction) plan put together by Greece, and that they are confident that it will be managed.”

But that was not enough to soothe concerns on the markets.

Tokyo's Nikkei ended 1.05 percent, or 105.27 points, lower at 9,951.82, the first time it has been below 10,000 since December 10.

Toyota extended its recent losses as it reels from a series of safety issues. The car maker dropped 1.05 percent to 3,280 yen, having plunged from above 4,000 yen in just a few weeks due to a series of safety issues.

Reports said Sunday the world's biggest car maker will recall 300,000 Prius hybrid vehicles because of brake flaws, just over a week after it called back almost eight million other cars over problems with the accelerator.

“I am not surprised that investors are buying Toyota shares on dips,” said one trader.

Hong Kong closed 0.58 percent, or 114.19 points, lower at 19,550.89 and Shanghai gave up 0.14 percent, or 4.23 points, to end at 2,935.17.

Both markets were suffering from a lack of buying interest before the Lunar New Year holiday, which starts at the end of the week, dealers said.

Seoul finished 0.91 percent, or 14.33 points, lower at 1552.79.

Doubts about a recovery of the U.S. job market increased after Washington said the world's largest economy shed 20,000 jobs in January, offering mixed signals about a sustainable recovery.

The figure was despite another survey showing the jobless total had fallen to 9.7 percent in December from 10 percent, partly reflecting that discouraged workers were leaving the labor market.

However, profit-taking following Friday's heavy losses helped some markets to claw back some ground. They also got a slight lift from a late run on Wall Street, which ended up 0.10 percent Friday.

Sydney closed 0.16 percent, or 7.1 points, higher at 4,521.4.

Singapore ended up 0.37 percent, or 10.06 points, at 2,693.62. Bank UOB rose 26 Singapore cents to 18.26 dollars.

Players are now looking ahead to the European reports on economic growth, due for release later this week.

In other markets:

— Wellington ended 0.37 percent, or 11.54 points, at 3,093.45.

— Jakarta lost 1.72 percent, or 43.40 points, to 2,475.57.

— Kuala Lumpur lost 1.02 percent, or 12.68 points, to close at 1,235.22.

— Manila fell 0.32 percent, or 9.04 points, to 2,846.60.

— Bangkok lost 0.48 percent, or 3.32 points, to close at 688.09.

— Mumbai rose 0.13 percent, or 19.96 points, to 15,935.61.

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