Asian markets off lows after Japan rate cut (AP) (19-12-2008)

HONG KONG (AP) -- Asian stocks advanced initially on Friday after Japan slashed interest rates to almost zero as central banks around the world seek to pump cheap money into the markets to support a troubled global economy.

The surge soon petered out, and Tokyo's 225 stock average dropped 78.71 points, or 0.9 percent, to 8,588.52. The dollar, higher in the morning, weakened against the yen after the bank's announcement.

Also following the Fed was the Philippine central bank, which cut its key interest rate by half a percentage point Friday.

Recent moves by central bankers around the world to loosen monetary policy -- aimed at reviving credit markets so companies spend again -- would ultimately help equity prices, said David Cassidy, chief equities strategist at UBS in Sydney,"

Hong Kong's Hang Seng Index was trading 1.9 percent lower at 15,203.66 even as Beijing said Friday it would help the territory keep its economy stable amid the global financial crisis.

Markets in mainland China, South Korea, Australia and Singapore traded higher but none posted gains of more than 1 percent.

Energy shares saw heavy selling after oil continued its downward spiral overnight, with the January contract falling as low as $35.98 -- levels last seen in June 2004. Prices recovered some in Asian trade, with light, sweet crude for February delivery up 73 cents to $42.40.

In currencies, the dollar fell to 89.01 yen, down from 89.51. The euro traded at 1.4259.

Source: AP