TOKYO: Asian stocks fell on Thursday as weak global manufacturing activity and an Ebola health scare in the United States spooked world markets, sending investors scurrying to the safety of US bonds, the Japanese yen and gold.
Investors warmed to the yen after a slew of surveys showed German factory activity shrank for the first time in 15 months, China's manufacturing sector barely grew, while the United States slowed more than expected.
Japanese stocks led the selloff in Asia, with the backdrop of concerns over global growth and a sputtering domestic economy pushing Tokyo's Nikkei down a sharp 1.9 percent to three-week lows.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.2 percent, with the downturn potentially limited by market closures in both China and Hong Kong for public holidays.
"Recent days has seen a barrage of nerve inducing events converge to cast a shadow over the investment outlook," Niall King, sales trader at CMC Markets in Sydney, wrote in report to clients.
"Confirmation of a case of Ebola in the US has joined a growing list of bad news stories with geo-political tensions in Ukraine and Hong Kong, and growth concerns around China and Europe sapping risk appetite," he said.
The continued civil unrest in Hong Kong has sapped investor confidence, although the city's streets were calm early on Thursday.
On Wall Street, US stocks dropped more than 1 percent on Wednesday on the Ebola news and the unexpected slowdown in US manufacturing growth.
The risk-averse mood benefited the yen and sent US Treasury yields down.
The dollar slipped back below 110 yen and was down 0.2 percent at 108.66 yen.
The euro rose 0.3 percent to $1.2662, crawling further away from a two-year low of $1.2571 hit earlier in the week.
Traders were also focused on the European Central Bank meeting later in the session with the divergence of US monetary policy with those of Europe and Japan now an established set market theme.
The US Federal Reserve is probing ways to normalise monetary policy, while the ECB and Bank of Japan are seen stuck with their very easy policies for the foreseeable future.
"The market interest is not in the rates decision, where the ECB insists the refinancing rate will not fall further from 0.05 percent, but in President Draghi's press conference," Sean Callow, senior currency strategist at Westpac in Sydney, wrote in a note to clients.
The markets will focus on the expected size of the ECB's plan to buy asset-backed securities and euro-denominated covered bonds after Draghi promised to provide "detailed modalities" of the plans at the previous meeting in September, Callow said.
In commodities, Brent crude oil fell toward $94 a barrel, continuing a three-month losing stretch as weak economic signals from China and Europe and ample global supply continued to weigh.
Brent crude dipped 5 cents to $94.11 a barrel.
Gold added to small gains, buoyed by risk-averse sentiment as weak global manufacturing data in the United States unnerved equity markets.
Spot gold rose 0.1 percent to $1,215.02 an ounce.
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