Asian shares retreat as global econ fears nag

By Rafael Nam

HONG KONG (Reuters) - Asian shares fell on Thursday as more bad news piled up for the global economy, while the dollar and yen steadied as central banks in the UK and Europe were set to cut interest rates to their lowest in years.

European shares were set to open slightly lower ahead of the central bank decisions, with the focus also on Swiss Bank Credit Suisse, which announced a net loss of about 3 billion Swiss francs (1.7 billion pounds) in the two months to end-November and cut another 5,300 jobs.

Despite a flurry of government measures in recent months aimed at stabilising markets, investor fears of further losses persist.

A corporate survey in Japan pointed on Thursday to a deeper recession than first thought, while Australia's vehicle sales slumped in November, in the latest signals that the global economic downturn is sparing few corners of the world.

Oil prices fell to below $46 a barrel to almost four-year lows, as investors opt for safer-havens. The U.S. Treasury 10-year yield hit its lowest in five decades, helped as well by expectations for more U.S. purchases of government debt.

Central banks are responding to weak economic growth by cutting rates aggressively, with the European Central Bank and the Bank of England on Thursday expected to join countries such as Thailand and New Zealand in slashing borrowing costs.

Whether they prove effective remains in question.

"The market may have become used to extremely weak economic numbers and are now wanting to see how dramatic policy actions taken across the globe, including monetary easing, will impact the economy and the stock markets," said Etsuko Yamashita, chief economist at Sumitomo Mitsui Bank, in Japan.