HONG KONG - Japanese stocks fell to a 16-month low and equities across Asia plunged on Wednesday as markets reacted to worsening US economic signals.
Tokyo's Nikkei index dropped 1.66%, or 149.75 points, to 8,845.39, its lowest close since April 30, 2009. The Topix index of all first-section shares fell 1.27%.
The yen reached a 15-year high 83.58 to the dollar in New York Tuesday, fuelling fears that the surge in the Japanese currency -- caused largely by investors seeking a safe haven -- could hurt the country's exporters.
Fuelling the rush to the yen were new data showing that US sales of existing homes had plunged 27.2% in July to levels unseen in more than a decade.
In New York the Dow tumbled 1.32%, the broader S&P 500 index was down 1.45% and the Nasdaq shed 1.66%. Investors are awaiting comments by US Federal Reserve chief Ben Bernanke on Friday for signs of further stimulus for the world's number one economy.
However the yen eased on Wednesday to 84.35 to the dollar on rising expectations of intervention by Japan's government or the Bank of Japan. The euro was at 106.63 yen from 106.00, while the European currency bought $1.2642 compared to 1.2670.
Prime Minister Naoto Kan, speaking to lawmakers in a closed-door meeting, said he regarded the currency's rise and economic measures to counter it "as priority issues", according to an online Nikkei daily report citing unnamed people at the meeting.
He said a series of small steps would not convince the market and added: "I wish to make an official announcement soon."
Finance Minister Yoshihiko Noda also warned of "appropriate action".
Economic jitters nonetheless fuelled a rise in the price of gold, which opened at $1,230.30-$1,231.30 an ounce in Hong Kong, up from Tuesday's close of $1,219.00-$1,220.00.
The US house sale figures "deepened concerns over the economic recovery, increasing demand for gold as a safe haven", Dow Jones Newswires quoted Phillip Futures as saying. "Gold may attempt to breach the next resistance level of $1,240 on an intra-day basis."
Elsewhere, Sydney closed down 1.40%, or 61.2 points, at 4,320.1 and Seoul closed down 1.46%, or 25.74 points, at 1,734.79.
Hong Kong was down 0.57% in the afternoon and Shanghai shed 1.35%.
Chinese airline stocks saw broad losses after a plane crash Tuesday in Heilongjiang province left 42 people dead, while sentiment in Shanghai was depressed by government plans to head off a property bubble.
Oil recovered slightly but prices remained below $72 amid energy demand fears caused by uncertainty in the US economy, analysts said.
New York's main contract, light sweet crude for October delivery, gained 24 cents to $71.87. The contract closed Tuesday in New York at $71.63, its lowest since June 7.
Brent North Sea crude for October was 23 cents higher at $72.61 a barrel. It closed Tuesday $1.24 lower at $72.38.
In other markets:
-- Wellington closed down 0.62%, or 18.58 points, at 3,006.05
Telecom was down 1.97% at 1.99 New Zealand dollars, Contact Energy fell 0.17% to 5.72 and Fletcher Building was 0.53% off at 7.49.
-- Taipei fell 2.56%, or 203.66 points, to 7,736.98.
Chimei Innolux shed 3.27% to 34.05 Taiwan dollars after announcing new legal action against Sony for alleged patent violations, while TSMC fell 1.51 percent to 59.6.
-- Manila rose 0.67%, or 23.66 points, to 3,554.15.