BANGKOK (AP) — Asian stock markets struggled for direction Thursday as investors remained wary following more unsettling news from economically fragile Spain and a record trade deficit in Japan.
Tokyo's Nikkei 225 stock average slipped after the country — which for decades has blanketed the world with its exports — posted its biggest annual trade deficit ever.
The benchmark index fell 0.8 percent to 9,585.85 after the Finance Ministry said exports for the fiscal year that ended March 31 dropped 3.7 percent from the previous year, while imports climbed 11.6 percent.
The trade deficit for the year was 4.41 trillion yen ($54 billion). With all but one of Japan's 54 nuclear power reactors offline in the aftermath of last year's nuclear disaster, the country has been forced to rely on imported oil and gas to generate electricity.
South Korea's Kospi index opened higher then slipped into negative territory, falling 0.2 percent to 2,000.79.
But Hong Kong's Hang Seng index held onto its gains, rising 0.5 percent to 20,877.67 while Australia's S&P/ASX 200 added 0.4 percent to 4,364.50.
Benchmarks in mainland China, Indonesia and the Philippines fell, while Thailand and Taiwan rose. Singapore swung between gains and losses.
Spain's central bank said the amount of bad loans held by Spanish banks rose to an 18-year high in February. If those banks falter, it would put pressure on Spain's already troubled government to prop them up.
The next key indicator for Spain will occur Thursday when the country holds a 10-year bond auction.
"Market sentiment turned sour yesterday on the concern over the stability of Spanish banking system," analysts at Credit Agricole CIB in Hong Kong said in an e-mail. "Overall, investors will likely remain cautious ahead of Spanish auctions."
Spain's problems have added to ongoing worries about global economic growth because China's economy also is slowing.
Jackson Wong, vice president of Tanrich Securities in Hong Kong, said traders were not only waiting for Spain's auction but also anticipating some monetary loosening by China, possibly this weekend, in order to help prop up its slowing economy.
Last week, China reported that its first-quarter economic growth was the slowest since the second quarter of 2009. The world's No. 2 economy grew by 8.1 percent in the three months ending in March, down from the previous quarter's 8.9 percent.
"China's GDP is slowing down faster than a lot of people were thinking, and Premier Wen Jiabao said the government would act accordingly if the economy is deteriorating fast. So that pretty much is the hint," Wong said.
Markets are hoping that Beijing will lower the ratio of deposits that banks must hold as reserves, a move that would boost lending, Wong said.
Wall Street fell Wednesday on concerns about Europe's debt crisis. The Dow Jones industrial average fell 0.6 percent to 13,032.75. The Standard & Poor's 500 fell 0.4 percent to 1,385.14. The Nasdaq composite index fell 0.4 percent to 3,031.45.
Benchmark oil for May delivery was down 9 cents to $102.58 per barrel in electronic trading on the New York Mercantile Exchange. The contract declined $1.53 to finish at $102.67 per barrel on Wednesday.
In currency trading, the euro fell to $1.3119 from $1.3133 late Wednesday in New York. The dollar rose to 81.39 yen from 81.24 yen.
Follow Pamela Sampson on Twitter at http://twitter.com/pamelasampson