The dollar slumped to a 14-year low against the yen on Thursday, helping gold scale another record high, while Asian stocks faltered as investors digested a mixed batch of economic data.
Financial bookmakers expected European stockmarkets to open lower while U.S. markets will be closed for the Thanksgiving holiday.
The dollar skidded below 87 yen to its lowest level since July 1995 as Japan said it was not planning to intervene in the market. It also hit a 15-month low against a basket of currencies <.DXY> as investors betted on prolonged weakness in the world's reserve currency.
Gold punched a new record above $1,192.60 an ounce on expectations more central banks would buy the precious metal to diversify away from the dollar, which has lost more than 8 percent against major currencies this year and is heading for its biggest yearly slide in six years.
Investors also sought out the Swiss franc as a safe way to diversify, pushing the currency to an 18-month high although analysts expected the Swiss authorities to intervene once European markets opened.
Deputy Japanese finance minister Yoshihiko Noda told Reuters that Tokyo was not planning to intervene in the market to rein in the yen. That helped depress shares of Japanese exporters and pushed Tokyo's Nikkei stock index <.N225> down 0.6 percent to a four-month low.
This will contribute still further to the current investors' shunning of Japan. If there were signs that the major problems were being dealt with things might get better, but as they are now it's pretty hard, said Noritsugu Hirakawa, a strategist at Okasan Securities in Tokyo.
Japan is back in deflation and the steel industry federation said the current yen rate could push Japan back into recession and urged the authorities to rein in the currency.
DISMAL START FOR MINSHENG IPO
Equity markets across Asia were subdued ahead of Thanksgiving holiday and as investors digested mixed economic data.
U.S. jobless claims fell to the lowest in more than a year last week and consumer spending and home sales rose more than expected in October but durable goods orders unexpectedly fell last month.
The MSCI index of Asia Pacific stocks traded outside Japan <.MIAPJ0000PUS> was down 0.7 percent and the Thomson Reuters index of regional shares <.TRXFLDAXPU> was 1 percent lower.
Shares in China slumped more than 3 percent as banking stocks fell on concerns about shrinking lending and possible needs to raise capital.
That dampened the Hong Kong trading debut of China's Minsheng Bank <1988.HK>, the country's seventh-largest lender. The $3.9 billion issue, the world's fifth-biggest IPO so far this year, saw Minsheng shares fall to as low as HK$8.95 from an offer price of HK$9.08.
Friday marks the start of the U.S. Christmas holiday shopping season and will provide a key indicator of demand for Asian exports in the final months of the year.
Asia-Pacific stock markets outside Japan have already rallied nearly 70 percent this year, making investors cautious as the year-end nears. However, analysts say the region still looks a good bet compared with other parts of the world as Western consumer demand remains fragile.
The Middle East has also lost some of its shine with Dubai on Wednesday reporting that two of its flagship firms planned to delay repayment on billions of dollars of debt.
The Australian dollar held firm as a rate rise still looked to be on the cards next week after data showed a sharp upgrade in Australian business spending plans even though investment unexpectedly slipped last quarter.
For the Reserve Bank (of Australia), rates at these levels are too low and we anticipate a move upwards in December of 25 basis points, said Andrew Hanlan, senior economist at Westpac in Australia.
In Vietnam, the dong currency was quoted near its new low point against the dollar after the central bank devalued the currency by more than 5 percent on Wednesday and narrowed its trading band.
The oil price dipped 0.8 percent but held above $77 a barrel.
(Additional reporting by Aiko Hayashi in TOKYO and the SYDNEY newsroom; editing by Kazunori Takada)