Hong Kong: Asian shares fell on Thursday as more bad news piled up for the global economy, while the dollar and yen steadied as central banks in the UK and Europe were set to cut interest rates to their lowest in years.

European shares were set to open slightly lower ahead of the central bank decisions, with the focus also on Swiss Bank Credit Suisse, which announced a net loss of about $2.5 billion in the two months to end-November and cut another 5,300 jobs.

Despite a flurry of government measures in recent months aimed at stabilising markets, investor fears of further losses persist.

A corporate survey in Japan pointed on Thursday to a deeper recession than first thought, while Australia’s vehicle sales slumped in November, in the latest signals that the global economic downturn is sparing few corners of the world. Oil prices fell to below $46 a barrel to almost four-year lows, as investors opt for safer-havens. The US Treasury 10-year yield hit its lowest in five decades, helped as well by expectations for more US purchases of government debt.

Central banks are responding to weak economic growth by cutting rates aggressively, with the European Central Bank and the Bank of England on Thursday expected to join countries such as Thailand and New Zealand in slashing borrowing costs.

The MSCI index of Asia-Pacific stocks outside Japan fell 0.6% as of 12am turning around after earlier gains of as much as 1.2%.

The MSCI index has advanced more than 10% since hitting a five-year low on 21 November, but is still down 59% for the year as of Wednesday’s close.

Although Wall Street shares rose on Wednesday for a second session on the back of defensive stocks seen as riding out a recession, data showed large job losses among US employers and a slumping service sector, suggesting the worst may not be over for the world’s largest economy.

Japan’s Nikkei average fell 1%, surrendering earlier gains of 1.3%.

Major share indexes in South Korea and Taiwan fell more than 1% each, Hong Kong fell 0.7%, while Australia ended flat.

But shares in Shanghai rose 1.5%, as financial stocks benefitted from the government’s liquidity measures on Wednesday and amid hopes for more economic stimulus measures.

Indexes in India and Singapore also advanced.