Asian Market Update: Most Asian equities are declining tracking the earlier selling in US stocks, pushing USD/JPY to a fresh 7-week low

- Australia's Q2 GDP rose more than expected (AUSTRALIA Q2 GDP Q/Q: 0.6% V 0.2%E; Y/Y: 0.6% V 0.3%E). In terms of the components for Australian GDP, domestic demand rose by 0.8% q/q v -1.1% prior, while consumption rose by 0.8%q/q v 0.4% prior. Additionally, Australia's Q2 business investment rose by 1.9% q/q v -6.2% prior. The better than expected GDP data is in line with recent comments out of the Reserve Bank of Australia, as the central bank recently noted that exports, business investment, household spending and housing investment were all above expectations.

- South Korea's Aug foreign exchange reserves rose for the 6th consecutive month to $245.5B. The increase came as the weaker dollar, led to increases in the values of holdings in other currencies. In Aug, the Bank of Korea added $3.4B in IMF SDRs to its reserves.

- In the currency markets, the Japanese Yen is firmer against most currencies, but off of the session's best levels as USD/JPY fell to a 7-week low. AUD/JPY and CAD/JPY are firmer, as they have been supported by the rise in oil prices and Australia's better than expected GDP data. In terms of the USD, the greenback is firmer against the European majors. Additionally, the dollar is declining against the commodity currencies.

- The Nikkei 225 is lower by more than 2%, led by losses in shares of technology companies and financials, Shares of chip maker Elpida Memory are sharply lower on concerns that the company may seek to conduct an equity offering. After closing the morning session higher, equities in Shanghai have moved into negative territory. Despite Australia's better than expected Q2 GDP data, the S&P ASX 200 is lower by more than 1.5% on declines in shares of financials and resource companies. Taiwan's Taiex is higher by more than 0.10%, led by gains in shares of computer company Acer. An article in the Taiwanese press quoted Acer's President as saying that the company's Q3 laptop shipments may rise sharply on a sequential basis due to the launch of Microsoft's Windows 7 and back-to-school demand. South Korea's Kospi is lower, but the index pared its losses after Fitch raised the country's sovereign outlook to stable from negative. The Hang Seng is declining by more than 1%, led by losses in shares of consumer goods stocks and financials.

- Crude oil prices are higher and trading above $68/bbl as the commodity received support from the API inventories data (API PETROLEUM INVENTORIES: CRUDE: -3.2M V -1ME; GASOLINE: -2.8M V -1ME). In NY floor trading, oil prices closed lower by more than 2%, tracking the decline in US equities. Looking ahead, crude oil prices could receive some direction from the later today release of the US Department of Energy's weekly inventories data. Spot Gold is lower by more than $1.50, tracking the decline in Asian equities. (Note: All quotes are as of 01:23 EST)