[HONG KONG] Asian markets tumbled for a second day on Wednesday, extending a global retreat, with Tokyo taking a hit from a strong yen after Japan's economy-boosting stimulus programme fell flat with investors.
Stocks rallied last month on promises of support from central banks, but disappointing stimulus, weak US data, plunging oil prices and worries about European banks have sent dealers scurrying for cover.
Japan's government unveiled details of a 28 trillion yen (S$366 billion) package on Tuesday that it hopes will kickstart growth in the world's number three economy.
But the plan fell short of market expectations as only a quarter of it included fresh spending, sending the yen surging.
The disappointing package - unveiled days after another sub-par stimulus from the Bank of Japan - saw the dollar tumble to a three-week low of 100.86 yen.
While it had edged up to 101.22 yen in early Asian trade, the stronger Japanese currency dragged on the country's exporters and by the break the Nikkei was down 0.9 per cent.
"After all the build-up, it's a disappointment," Shane Oliver, a global investment strategist at AMP Capital Investors in Sydney told Bloomberg News.
This will weigh on Asian stocks, "reflecting the negative response we've already seen in the US and Europe overnight," he added.
Elsewhere, Hong Kong was down 1.5 per cent with traders also playing catch-up with regional losses Tuesday, when the city's exchange was closed because of a typhoon.
Sydney shed 0.8 per cent, Seoul was 0.7 per cent off and Singapore shed 0.9 per cent and Manila 1.8 per cent lower. Wellington and Taipei also tumbled.
US and European markets ended down, with anxiety growing that stress tests to measure the mettle of Europe's banks were overly lenient, said Chris Low, chief economist at FTN Financial.
The overriding fear concerns the difficulty banks face making money in a low interest rate era.
Oil edged up slightly, but investors remain on edge after the commodity sank into a bear market - a 20 per cent fall from recent highs - on renewed worries about a supply glut as the crucial US summer driving season nears its end.
Brent edged up 0.6 per cent to US$42.04 and West Texas Intermediate added 0.7 per cent to US$39.79.
Both contracts are well down from the levels above US$50 touched in early June when output was hit by disruptions in Nigeria and Canada.
Attention will now turn to Friday's US jobs report to provide a fresh snapshot of the US economy, with a weak figure likely to dent expectations of a Federal Reserve rate hike this year.