Asian Stocks Fall on Bleak Economic Data

European Markets Mixed at Close

TOKYO, Oct. 24 -- Stocks in Japan and across most of Asia fell again Thursday, as grim government numbers showed the region's real economy sinking along with global demand for its exports. Near the close of trading, markets recovered some of their losses; Shanghai's main market index closed higher for the first time in three days.

European markets were mixed, with London's FTSE 100 index up by a bit over 1 percent and Germany's DAX down by a like amount. Latin American markets slipped for a third day running -- Brazil's Bovespa index was off 3.6 percent, while Mexico's Bolsa lost 5.3 percent.

Asian stocks got off to another miserable start on Friday. The benchmark Nikkei average in Japan was down 4.9 percent at the end of morning trading. In South Korea, stocks fell 4.5 percent in the morning and appeared to be heading for the worst week in a decade.

In Tokyo on Thursday, the Finance Ministry announced that Japan's trade surplus had fallen 86 percent in the past six months and is the smallest in nearly 27 years. A soaring yen, collapsing global demand and rising import costs are hobbling the world's second-largest economy, which depends for growth on exports to the United States, Europe and China.

A telling measure of prospects for those exports was the price of stock in Mazda Motor Corp., which fell 11 percent Thursday. Japanese exports to the United States have declined for 13 consecutive months.

As export demand slumps, so does the value of shipping companies. World shipping rates for commodities fell this week to a six-year low. Japan's third-largest shipping firm, Kawasaki Kisen Kaisha Ltd., fell Thursday to its lowest level in five years.

Reports from China this week showed declines in the country's once-booming real estate sector, as prices in 70 major Chinese cities fell for the second consecutive month, the government reported.

To prop up home prices, the government -- which only months ago was trying to cool an overheated market -- said it will relax rules for down payments and cut mortgage rates for first-time buyers. The announcement appeared to cheer investors, as stocks rose in Shanghai.

In South Korea, the central bank announced Thursday that it will increase the amount of low-interest loans available to small businesses, which have been frozen out of credit markets in recent months. Last weekend, the Seoul government committed $130 billion to prop up the country's beaten-down currency, the won, and to stabilize stocks. But both have continued to lose value, as export prospects sour.

The won is down about 34 percent against the dollar this year and is the worst-performing major currency in the world. Stocks in Seoul have lost about a quarter of their value this month. They were down more than 7 percent Thursday.

To bail out South Korea's ailing construction industry, the government this week announced a far-reaching program to buy land and unsold houses from builders. Small and medium-size construction companies have been all but unable to borrow money since the summer.

Economic deterioration in South Korea -- or at least official recognition of that deterioration -- is moving at a brisk pace. Two weeks ago, Finance Minister Kang Man-soo said in an interview that the economic fundamentals in his country were sound, with booming exports and plenty of foreign currency reserves.

This week, he told reporters that the country faces more difficult conditions than during the 1997-98 Asian financial crisis, when South Korea was bailed out by a loan from the International Monetary Fund.

In Tokyo, the benchmark Nikkei average skidded 7 percent before recovering to close 2.5 percent down. Stocks in Hong Kong also recovered slightly after falling more than 6 percent.