Asia stocks drop for fifth day

By Kevin Plumberg

HONG KONG (Reuters) - Asian stocks fell about 4 percent, down for a fifth consecutive day, and government bond prices rose on Wednesday as fears of a looming global recession grew with no sign of a coordinated response or an end to the worsening financial meltdown.

The yen climbed as investors clung to anything resembling stability after Federal Reserve Chairman Ben Bernanke warned turmoil in markets could cause U.S. economic activity to be subdued into 2009 and signalled a readiness to cut interest rates.

"The deteriorating outlook for the economy and the deepening financial crisis are pushing fears to their limit," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management in Japan.

Tokyo's Nikkei share average dropped 4.5 percent, hitting a fresh 5-year low, taking losses for the past five days to 15 percent.

Shares of Toyota Motor Corp fell more than 5 percent after a report the car maker's annual operating profit will likely fall around 40 percent in the year to next March.

Australia's S&P/ASX 200 index slid 3.5 percent, a day after rallying on a much larger-than-expected interest rate cut by the country's central bank.

The MSCI Asia-Pacific index of stocks outside of Japan was down 4.4 percent to a near 3-year low. The index has fallen a staggering 25 percent in a month and 46 percent so far this year, underperforming the MSCI all-country world index, which has fallen 36 percent year-to-date.

Hong Kong's Hang Seng index fell 5.4 percent to a 27-month low after a market holiday on Tuesday.