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Hong Kong - Oil prices fell further on Wednesday, heading to six-year lows, while crude's weakness continues to test investor confidence, pushing the yen up and weighing on Asian equities.
The euro also slipped further after comments from a key member of the European Central Bank fanned expectations that it will unveil a vast bond-buying scheme at its policy meeting next week.
On oil markets US benchmark West Texas Intermediate for February fell 18 cents $45.71, a level not seen since March 2009, and Brent slipped 25c to $46.34, its lowest since April 2009.
Both contracts were hammered on Tuesday after two members of Opec said the cartel could not prevent prices from plunging further, despite losing more than 50% since June.
Ministers from the United Arab Emirates and Kuwait also said prices could drop further unless there is a cut in booming shale oil output in the United States.
Analysts say richer cartel members - such as the UAE and Saudi Arabia - have been ready to accept falls in the hope they will force higher-cost shale producers out of the market.
The weak prices have hit buying sentiment for global equities, with the Dow, S&P 500 and Nasdaq all sinking in New York.
In Asia Tokyo fell 0.80% on Wednesday and Sydney gave up 0.26%, while Seoul was flat. However, Shanghai added 0.27% on speculation the government will make more cash available to avert a cash crisis, while Hong Kong edged up 0.20%.
On currency markets a flight to safer investments saw the yen advance.
The dollar was at ¥117.80 early on Wednesday, down from ¥117.90 in New York and well off rates above ¥118 seen in Tokyo earlier on Tuesday.
"If stocks continue to slump on the idea that low oil prices will become a risk to the US or the global economy, dollar-yen will continue to fall," said Masato Yanagiya, head of foreign exchange and money trading at Sumitomo Mitsui Banking in New York. "It'll be easy for the yen to strengthen amid a flight to quality," he told Bloomberg News.
The euro bought ¥138.60 and $1.1766 against ¥138.84 and $1.1777 in US trade.
The single currency took a hit Tuesday after Ewald Nowotny, a governor of the Austrian central bank and a member of the ECB governing council, highlighted the need for policy makers to tackle the threat of deflation.
"It is important that one takes deflation risks seriously and addresses them," Nowotny said, according to Bloomberg News, adding that the bank was weighing several stimulus measures. "We shouldn't wait too long with a reaction."
Analysts said the remarks were a sign the ECB may act when it meets on January 22, in part because Nowotny is not known for being particularly interventionist
Gold was $1 232.34 an ounce, compared with $1 238.84 on Tuesday.
