Most Asian stock markets fell yesterday, following a Wall Street dive on fears over the fate of some of the world's biggest financial firms amid the global crisis.
Japan sought to boost sentiment by saying it would free up $5 billion (Dh18.36bn) from its forex reserves to lend to troubled companies, with a Toyota unit reportedly asking for a $2bn loan.
The finance minister of the world's number two economy said if stock market swings threatened to have a "devastating impact" on the economy, the government would use all means to stop them.
The previous day US markets were hammered down to 12-year lows on news the US Government had rescued insurer American International Group again, with $30bn, to stave off its collapse.
European markets were roiled after British banking giant HSBC said it needed billions in new capital to cope with the financial crisis.
Hong Kong ended the morning 1.5 per cent lower, as HSBC dragged down the main bourse, dealers said, while Chinese share prices ended down 1.05 per cent.
Japan closed down 0.69 per cent, Australia fell one per cent, and New Zealand shares fell 2.56 per cent to their lowest level in more than five years. In some regional gains, South Korean shares rose 0.7 per cent, Taiwan closed 0.21 per cent higher, and Philippine shares edged up 0.2 per cent, lifted by bargain-hunting.
Japan's Nikkei dropped to 7,229.72, having at one point during the morning session dipped below a 26-year closing low. The Topix index fell 1.1 percent to 726.80, the lowest since November 1983.
Even worse falls were avoided as the government is considering using public funds to purchase stocks directly from the market to boost prices, although the timing and size of the intervention remained unclear. "A tug of war may continue between gruesome external factors and hopes for domestic government support," Daiwa Securities SMBC market analyst Yumi Nishimura said.