Asian stocks fell on Wednesday on growing concerns about the health of the world's banks, particularly in Europe, pushing investors into safer assets such as the yen, which stood near a 15-month high versus the dollar.
Japan's Nikkei .N225, which tumbled more than 5 percent Tuesday, suffered another bruising session and slid to a 16-month low.
The Nikkei was last down 4 percent with falling bank shares and a stronger yen continuing to take a toll on sentiment.
"Concerns about European banks are contributing to the risk off mood in markets. In addition, U.S. data this month has been weak and Fed officials appear to be toning down on rate hikes," said Shinichiro Kadota, chief FX strategist at Barclays in Japan.
European shares rebounded back up on Wednesday from two-year lows reached in the previous session, helped by some solid corporate earnings and signs of corporate takeover activity.
The pan-European FTSEurofirst 300 index, which had fallen 1.6 percent to its lowest point since September 2013 in the previous session, recovered slightly to rise 0.4 percent.
The euro zone's blue-chip Euro STOXX 50 index gained 0.5 percent, while Britain's FTSE 100 advanced 0.6 percent.
According to Thomson Reuters StarMine data, roughly half of the companies in the pan-European STOXX 600 index have reported fourth quarter results, and 52 percent have beaten or met expectations while 48 percent have missed. (Reporting by Sudip Kar-Gupta; Editing by Atul Prakash)
Reference: Reuters
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