Japan stocks fall for seventh day amid global sell-off

Japanese stocks fell for the seventh straight session as fresh fears over the health of the world economy sparked a global sell-off.

The Nikkei 225 index shed 0.8%. Elsewhere, Hong Kong's Hang Seng and Australia's ASX 200 also dropped 1%.

Worries over the eurozone debt crisis and the US economic recovery hit shares of big Asian exporters.

But European stock markets started Wednesday with modest gains, following Tuesday's sharp losses.

In Europe, investors are closely watching the performance of Spanish government bonds.

The yield, which indicates how much the Spanish government would have to pay to borrow money, has been rising towards 6%.

That suggests a lack of confidence among international investors that Spain can get its debts under control.

Spanish Prime Minister Mariano Rajoy has been trying to reassure the markets that his government is committed to containing the deficit.

Analysts warn that Europe's debt troubles could prompt further falls for shares this year.

"2012 is at risk of being a carbon copy of 2011, where equity markets began the year with a spring in their step before sentiment turned very bearish as the European sovereign debt crisis spiralled out of control", said Angus Campbell of Capital Spreads.

At the same time, a weaker-than-expected jobs data from the US has raised concerns about the recovery in the world's biggest economy.

Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets, said the combination of these factors was prompting investors to take a cautious approach.

"Investors are in a risk-off mode, with the US job numbers and the situation around Spain becoming an excuse for the sell-off."

'Wild card'

Adding to investors concerns have been fears about a slowdown in China, the world's second-largest economy, and one of the main drivers of global growth in recent years.

China's export sector is one of the biggest contributors to its economic expansion. However, a slowdown in its key markets such as the US and eurozone has raised fears that Beijing may not be able to maintain its high pace of growth.

Analysts said that investors were being cautious ahead of China's growth data, which is scheduled to be released later this week.

"How much is China going to slow down, that is the big wild card," Hans Goetti, chief investment officer of Finaport told the BBC. "The first quarter growth could be even less than 7.5%."

Chinese premier Wen Jiabao has set a growth target of 7.5%, the lowest since 2004.

In Tokyo, Sony fell 5%, a day after after it doubled its forecast of an annual loss to $6.4bn (£4bn).

"Japan's consumer electronics industry is facing defeat," said Fujio Ando, senior managing director of Chibagin Asset Management.

"I don't think there is any guarantee that we will see the company return to black this year." he said.