Asia stocks dip on growth fears

By Kevin Plumberg

HONG KONG (Reuters) - Asian stocks edged lower on Wednesday as investors grew more pessimistic about the outlook for global growth, clinging to the relative safety of U.S. government debt and pushing oil below $138 a barrel.

European stocks were seen faring better, to open as much as 0.5 percent higher, according to financial bookmakers, as energy prices eased.

Companies across the Asia Pacific region, such as Toyota Motor Corp, the world's biggest car maker, and Huaneng Power International, China's top electricity provider, have been lowering their sales and earnings forecasts in the face of slower demand and higher costs.

Federal Reserve Chairman Ben Bernanke said that while the likelihood is high that the U.S. economy would slow further, the outlook for inflation had also intensified, providing little comfort for investors and consumers struggling in stagflationary conditions.

Shares in the financial sector recovered somewhat though unease about banks' balance sheets after the unveiling of a U.S. bailout plan for top mortgage lenders Fannie Mae and Freddie Mac remained a festering issue.

"The macro economy is now facing the prospect of the triple shock of an extended credit crunch, high inflation and slowing growth; the very three objectives central bank policy is designed to overcome," said Sean Darby, chief Asia strategist for Nomura in Hong Kong.

Japan's Nikkei share average ended the session barely changed, after earlier touching a 3-1/2-month low.

Toyota cut its global sales target for 2008 by 3.6 percent, largely to reflect a sharp U.S. slowdown, according to Japanese broadcaster NHK, dragging the company's shares down 1.3 percent and representing the extent to which sluggish growth in the West has a domino effect on the rest of the world.