According to Bloomberg, the Asian stocks declined for a third day. Japan's Topix index dropped to a two-year low after reports of subprime losses at U.S. banks sent the dollar tumbling against the yen.
Japan's Sony Corp., which gets about 70 percent of sales abroad, fell on speculation the yen's gain will erode profit. Lenders including Australia and New Zealand Banking Group Ltd. declined on concern credit-market losses will spread.
``It's not just the decline in U.S. stocks that we need to worry about; investors are reducing risk, which is causing yen strength across a lot of currencies, and that's bad for the exporters,'' said Norihiro Fujito, a senior strategist at Mitsubishi UFJ Securities Co. in Tokyo.
BHP Billiton Ltd. dropped for a second day after Perennial Investment Partners Ltd. said the world's largest mining company may need to offer a 60 percent premium to the pre-takeover bid price for its offer to buy Rio Tinto Group to be accepted. Shares of Rio jumped to a record.
The Morgan Stanley Capital International Asia Pacific Index dropped 2 percent to 159.65 as of 10:19 a.m. in Tokyo, adding to a two-day, 2.7 percent drop. All 10 industry groups declined.
Japan's Topix, which was set for its lowest close since Oct. 31, 2005, dropped 2.5 percent, its seventh straight day of declines, while the Nikkei 225 Stock Average fell 2.5 percent to 15,195.31.
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