For Asian stocks, it was not a good week — again.

Overall, Asian stocks tumbled for the fourth week, posting their biggest drop in 17 years as a deepening U.S. housing slump and spreading credit crunch cooled investor demand for equities.

Japan's Topix Index had its biggest weekly drop since the end of the asset inflation 'bubble' of the 1980s and the Nikkei 225 Stock Average posted its largest loss since the Sept. 11 terrorist attacks, dropping almost 900 points, or 5.4 percent last night alone.

The Morgan Stanley Capital International Asia-Pacific Index lost 8 percent to 137.14, erasing this year's gain as all of the MSCI's 10 industry groups fell.

"The market seems to be saying that it's frightened, it's not sure what it's frightened of, but it's still running anyway," said Jeremy Hall, who helps oversee $3.5 billion at Henderson Global Investors Ltd. in Singapore. "It may take a little time for calm heads to prevail."

Because the Asian markets operate a day ahead of the American market, they were not affected by yesterday's move by the U.S. Federal Reserve that lowered the rate on loans charged to banks.

That move stopped a global slide that had lasted more than a week amid turmoil in the credit markets — everywhere but in Asia, where all markets had closed for the week.

Central banks around the world have poured billions in additional liquidity into the banking system, but yesterday's rate cut marked the Fed's most dramatic move.

"This move should be seen as more of a reassurance step, should interbank liquidity begin to dry up again," said ING economist Rob Carnell.

But other analysts were less certain about the move.

"The market turbulence has forced the Fed's hand here, and whilst an emergency cut might give the markets some temporary relief, some might say there is a sense of panic coming from the Fed," said Martin Slaney, head of spread betting at GFT Global Markets.

The Fed cut the discount rate to 5.75 percent from 6.25 percent, declaring that "downside risks" to the economy have increased appreciably.

Mitsubishi UFJ Financial Group Inc. paced a slide among lenders after reporting losses related to U.S. subprime loans. Rams Home Loans Group Ltd. plunged after the Australian company failed to refinance short-term U.S. loans.

Before the Fed's rate cut, investors spent the week selling high-yielding or riskier assets funded by yen-denominated loans.

The yen fell in New York trade after the Fed's cut, trimming its weekly advance to 5.1 percent versus the euro and 3.5 percent against the dollar.

Japan's exporters dropped as a stronger yen cuts the value of their foreign earnings in local currency and makes their goods less competitive in overseas markets.

Toyota Motor, the world's largest automaker by market value, slid 13 percent to 6,190 yen, the lowest since September. Canon Inc., the world's biggest maker of digital cameras, slumped 14 percent to 5,400 yen, the most since October 1998.