Asian Stocks fall fearing US Recession

Asian stocks fell for the first time in four days on concern a slowdown in the world's two largest economies will weaken consumer demand and drag on global growth.

Mitsubishi UFJ Financial Group Inc. led declines in Japan after Goldman, Sachs & Co. said the nation's economy is probably in a recession. Komatsu Ltd., Japan's largest maker of construction machinery, slid after CLSA Ltd. slashed its rating. Advantest Corp. slumped after Merrill Lynch & Co. advised investors to sell shares of the maker of memory-chip testers.

``The U.S. is either also close to a recession or already in it,'' Hans Goetti, chief investment officer of LGT Bank in Liechtenstein AG, which manages $10 billion, said in an interview with Bloomberg Television. ``The question is, is the U.S. consumer going to hold up.''

The MSCI Asia Pacific Index dropped 2.1 percent to 142.93 as of 11:59 a.m. in Tokyo, taking its losses so far this year to 9.4 percent. A measure of the benchmark's volatility jumped to 61, the highest since October 1998. About eight stocks retreated for each that advanced.

Japan's Nikkei 225 Stock Average lost 2.6 percent to 13,274.93. Benchmarks in other markets open for trading declined. Australia is closed for a holiday.

U.S. stocks slid on Jan. 25, sending the Standard & Poor's 500 Index lower for the first time in three days. European shares dropped, dragging the Dow Jones Stoxx 600 Index to its seventh straight weekly decline.

MSCI's Asian index plunged 10 percent in the first two days of trading last week on concern that a weakening U.S. will affect economies elsewhere. A rebound following the Federal Reserve's surprise interest-rate cut failed to offset earlier losses.

Banks Decline

Mitsubishi UFJ, Japan's largest publicly traded bank, slid 5.2 percent to 986 yen. Sumitomo Mitsui Financial Group Inc., the second-biggest, dropped 4.6 percent to 805,000 yen.

U.S. growth probably slowed to a 1.2 percent annual rate from October to December, a quarter of the previous three months' pace, according to the median estimate in a Bloomberg News survey. The GDP report is due on Jan. 30.

Japan's economy probably entered a recession amid ``a slump in domestic demand,'' Tetsufumi Yamakawa, Goldman Sachs chief Japan economist, said in a report today.

Kookmin fell 2.1 percent to 61,100 won. DBS Group Holdings Ltd., Southeast Asia's largest bank, slid 2 percent to S$18.56.

Komatsu dropped 6.3 percent to 2,460 yen. The shares were cut to ``underperform'' from ``buy'' by Takeaki Ueno, an analyst at CLSA.