Asia stocks fall on recovery fears

Strong corporate earnings figures were unable to lift Tokyo's downbeat sentiment as fears that the global recovery may be slowing sent dealers into sell-off mode.

Tokyo's Nikkei gave up 1.64 percent, or 158.72 points, to close at 9,537.30 after the government released figures showing unemployment was rising and industrial production had unexpectedly dipped.

The jobless figure was up 0.1 percentage points at 5.3 percent last month, giving Premier Naoto Kan a headache as he tries to drag the world's second biggest economy out of a painful recession while slashing the country's huge public debt.

Adding to his woes were data showing industrial output dropped 1.5 percent from the previous month, a serious worry as the country is banking on exports to boost its recovery.

The news dented traders' confidence, causing them to brush aside Thursday's earnings reports, which showed Sony rebounded to profitability in the fiscal first quarter and raised its full-year earnings forecasts. Sony rose 3.60 percent to 2,705 yen.

Sydney fell 0.68 percent, or 30.6 points, to close at 4,493.5, while Hong Kong closed 0.30 percent, or 64.01 points, lower at 21,029.81.

Shanghai finished 0.40 percent, or 10.61 points, lower at 2,637.50.

“Asian markets are a bit weaker and we've had some pretty negative industrial production data from Japan,” IG Markets institutional dealer Chris Weston told Dow Jones Newswires in Sydney.

Wall Street provided a weak lead, falling 0.29 percent on concerns that figures from the Commerce Department later Friday will show the U.S. economy slowed in the second quarter.

A top Fed official warned of “Japanese-style” stagnation in the world's leading economy and cautioned about “the peril” of deflation.

The comments by James Bullard — a member of the Fed's interest rate-setting panel — came as analysts predicted gross domestic product for the second quarter had slowed to 2.5 percent, from 2.7 percent in the first three months.

The concerns weighed on the dollar, which slipped to 86.41 yen from 86.80 in New York Thursday afternoon.

The euro stood at US$1.3062, slightly down from US$1.3076 in New York. The European single currency dropped to 112.78 yen from 113.51.

Seoul closed down 0.65 percent, or 11.55 points, at 1,759.33, despite Samsung posting a record second-quarter profit after an 83 percent jump from the previous year.

Oil was lower: New York's main contract, light sweet crude for September delivery, was down 28 cents at 78.09 dollars a barrel following gains in US trade overnight.

London's Brent North Sea crude for September declined 19 cents to US$77.40.

Gold opened at US$1,168.00- US$1,169.00 an ounce, up from Thursday's close of US$1,165.80- US$1,166.80.

In other markets:

— Singapore closed down 0.33 percent, or 9.95 points, at 2,987.70.

— Taipei fell 0.49 percent, or 38.36 points, to 7,760.63.

— Manila edged 2.76 points lower to 3,426.59.

— Kuala Lumpur closed up 0.18 percent, or 2.51 points, at 1,360.92.

— Jakarta lost 0.89 percent, or 27.53 points, to end at 3,069.28.

— Wellington was flat, adding 1.61 points to end at 3,034.62.

— Bangkok added 0.15 percent, or 1.24 points, to close at 855.83.

— Mumbai closed 0.69 percent, or 123.71 points, lower at 17,868.29.

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