Asia shares fall on growth fears

HONG KONG: Asian markets mostly fell Wednesday as dealers ignored a surge on Wall Street, with worries about the global economy continuing to weigh on sentiment while Japan's credit rating was cut further.

The dollar slipped against the yen on disappointment over a Japanese plan to halt its currency's rise, which hit a post-war record last week, with many dealers saying the government was not bold enough, analysts said. Most regional bourses began on a high after the three main indexes in New York posted huge gains on hopes that Federal Reserve chairman Ben Bernanke will announce a fresh round of monetary easing to kickstart the US economy.

However, they soon retreated, with nervousness stoked by a downgrade by Moody's of Japan's credit rating, citing the country's high debt levels and budget deficit.

Tokyo lost 0.19 percent by the break, Hong Kong fell 0.96 percent, Seoul slumped 1.49 percent and Taipei was 1.28 percent lower while Sydney was 0.10 percent off. However, Shanghai gained 0.24 percent.

Traders were given a strong lead from the United States, where the Dow soared 2.97 percent, the S&P 500 leaped 3.43 percent and the Nasdaq climbed 4.29 percent ahead of a key speech by Bernanke this week.

Expectations are high that the Fed chief will announce new plans -- such as a third round of quantitative easing -- to deal with the stagnating US economy, which many fear could fall back into recession. US markets were also given a lift by better-than-expected manufacturing data from China and the eurozone.

However, the upbeat sentiment was dented by the decision by Moody's to cut Japan's bond rating to Aa3 from Aa2, citing the "large budget deficits and the build-up in Japanese government debt since the 2009 global recession". The news sent the dollar up to 76.77 yen in Tokyo morning trade from 76.68 in New York late Tuesday.