Little that officials said could convince panicky investors that governments can stem the fast-spreading crisis that is menacing financial markets, economic growth and company earnings.

The yen continued to gain even after Group of Seven finance ministers on Monday singled out the excessive volatility of the currency, which is battering Japanese share prices.

European shares were expected to open sharply lower with losses of up to 2.3 per cent, tracking weakness in Asia, while oil prices extended falls to below US$64 (S$96.64) a barrel.

'The outlook in terms of growth and exports remains shaky, so it's hard to make a case for any sustained EM (emerging markets) rally for now,' said Mr Win Thin, a senior currency strategist at Brown Brothers Harriman in an email to clients.

However, Mr Thin noted that government actions may eventually turn some of these markets around.

'We continue to believe that markets will reward those countries that are acting proactively to avoid a deeper economic slowdown,' he also wrote.

Japan's Nikkei index swung wildly throughout the session before ending down 6.4 per cent at its lowest close since 1982 as exporters such as Canon Inc slumped on the stronger yen.

Japanese lenders also tumbled on concerns they will need to raise billions of dollars to offset hefty losses on their stock portfolios as the global equity market rout continues.

Mitsubishi UFJ Financial Group plunged 14.6 per cent.

The MSCI index of Asian stocks outside Japan fell for a fourth consecutive session, losing 3.2 per cent as of 2.20pm to its lowest since May 2004.

The MSCI index has now lost 41 percent since Sept 12, right before the collapse of investment bank Lehman Brothers set off heavy selling. The index isdown over 60 per cent for the year.

Taiwan , Hong Kong and Shanghai fell over 4 per cent each, while stocks in India lost 3.8 per cent. Trading was briefly halted in the Philippines after the marke fell 10 per cent, though Singapore was closed for a holiday.

South Korean shares posted a gain after seesawing between positive and negative territory, with selling from jittery investors offsetting a boost from anemergency rate cut by the central bank. The KOSPI ended up 0.8 per cent after earlier dropping as much as 5 per cent.

'Nobody can tell for sure where the support levels are or where the bottom is,' said Mr Castor Pang, a strategist with Sun Hung Kai Financial in Hong Kong.

'The current bear market trends point to continuous declines in the market as fund managers unload their positions in the face of increased redemptions.'

POLICY FIREPOWER?

Japan pledged fresh measures on Monday to try to shield the world's second-biggest economy from the financial crisis while South Korea slashed interestrates and Australia's central bank intervened for a second day to support its tumbling currency.

The actions by Asian policy makers come days ahead of a widely expected interest rate cut of 50 basis points by the US Federal Reserve on Wednesday and the US advance report on third-quarter economic growth due on Thursday.

Few expect the sinking global economy to recover quickly despite moves by central banks to cut rates, or government efforts that have so far included pledgingabout US$4 trillion in a bid to support banks and thaw frozen credit market.

Emerging markets have been hit especially hard in the global sell-off. Several more countries are expected to turn the International Monetary Fund after Ukraine on Sunday agreed on a US$16.5 billion loan package to ease the effects of the financial crisis.

'The length and depth of the slowdown we still don't know, but the market is definitely pricing in a recession,' said Toby Hassall, chief analyst at Commodity Warrants Australia in Sydney.

On Monday, the Group of Seven warned the surging yen posed a threat to financial and economic stability, in the latest coordinated effort by the world'srichest nations to contain the worst financial crisis in 80 years.

Analysts said the G7 statement suggested authorities were getting closer to the point where they would consider intervention, possibly jointly, to stem the yen's recent surge.

Yet the yen , after initially slipping slightly on the news, climbed towards a 13-year peak against the dollar hit on Friday, and an all-time high versus the

Australian dollar as the Nikkei's average plunge overshadowed the G7 warning.

The yen has firmed as market players have rushed to unwind carry trades built up over the last several years in which they borrowed the yen to invest in higher-yielding, riskier assets.

The dollar dipped 1.2 percent from late US trade last week to 93.16 yen , pulling back after rising to near 94.50 yen after the G7 warning. The euro was down about 2 per cent at 116.74 yen , near a six-year low of 113.79 yen hit on Friday.

The Australian dollar hovered near record lows against the yen and a 5-year trough on the US dollar, even after the central bank intervened on Monday for a second day.

In other signs of global recession fears, oil fell 33 cents to US$63.82 a barrel, after earlier touching a 17-month low of $63.67. That built on Friday's losses thatsaw prices of crude tumble more than $3 a barrel.