Asian stocks fall on credit woes

By Rafael Nam

HONG KONG (Reuters) - Asian stocks fell more than 2 percent on Friday as fears of more credit-related losses hit financial shares and a record low dollar routed exporters.

The combination of a worsening global credit outlook and signs of a weakening U.S. economy kept investors on edge, sending the dollar to all-time lows against both the euro and a basket of currencies, and a three-year low against the yen.

Making it worse, oil prices held near a record $106 a barrel on the back of the falling U.S. currency, reinforcing concerns that surging commodity prices will fuel inflationary pressures at a time of slowing global growth.

Bonds across the region gained, with Japanese government bond futures hitting a 2-½ year high as investors opt for safety.

"There are still serious concerns about credit markets, particularly about where the U.S. economy is heading," said Tony Russell, senior equities adviser at ABN AMRO Morgans in Australia.

"We're probably close to re-testing our lows seen earlier this year."

The MSCI measure of Asian stocks excluding Japan .MIAPJ0000PUS fell touched its lowest since February 12, and was trading down 2.6 percent at 4:06 a.m. British time. The index is heading for a weekly loss of close to 5 percent.

Japan's benchmark Nikkei average .N225 hit a six-week low and was down 3.3 percent, while shares in Hong Kong .HSI and Australia .AXJO were down more than 3 percent each.