Both countries saw some important data releases, but as pointed out by Matthew Strauss, strategist with RBC Capital Markets, there are a "number of important data releases in Asia, Europe, UK, Canada and the US, but any data-driven moves will be short-lived with attention squarely focused on global financial developments."

Strauss said traders should "expect huge equity losses as Asian markets start trading today."

Accordingly, the Nikkei hit a three-year low today and the ASX also plunged, although not as much as expected according to futures prior to the open.

The yen benefited from heightened risk aversion during the session.

Mark Chandler, strategist with Brown Brother's Harriman said most currencies suffered today but that "The notable exception is the Japanese yen, and to a lesser extent the Swiss franc. These two currencies continue to enjoy an inverse correlation with the equity market volatility."

Earlier today, Japanese preliminary industrial output decreased 6.9% in August on an annualized basis, down from the consensus estimate of -6.0% and down from July's +2.4% growth rate.

Real household spending decreased more than expected in Japan, with the annualized rate in August coming in at -4.0% compared to the previous month's -0.5% level. The fall represents the sharpest decline seen this year.

Today also saw the release of dismal unemployment data, which increased to 4.2% in August despite expectations for an increase to 4.1% from 4.0% in July.

The yen briefly fell against the U.S. dollar to session lows following the releases before climbing back up.

Tomorrow, markets will receive the closely-watched Tankan survey, whose headline manufacturer's index is expected to decline to -2 from +5 in the second quarter.

The Aussie dollar suffered despite a positive retails sales and private sector credit report at home. Strategist Peter Pontikis with Suncorp said the Aussie fell along with all commodity currencies after the U.S. Treasury's $700 billion bailout plan did not pass.

Patricia Gacis, strategist with ANZ Markets said, "The AUD/USD fell sharply overnight and is only just keeping above 0.8000 after the failure to pass the TARP prompted a sudden unwind of carry-trades. Weaker commodity prices also weighed on the AUD."

Earlier in the session, Australian markets received private sector credit, building approvals and retail sales for August.

Australian retail sales trend increased by 0.3% in August, amounting to a 3.2% year-over-year increase and matching July's upwardly revised 0.3% month-over-month rise.

Australian seasonally adjusted building approvals totalled 12, 095 in August compared to 12,620 in July. This represents a 3.7% month-over-month contraction for the month against expectations for 1.0% decrease.

Credit from Australian financial intermediaries decreased as expected by 05% for the month of August, up from last month's upwardly revised 0.6% figure.

Tomorrow, Australian markets will receive the AiG performance of manufacturing survey.

Asia-Pacific fixed income markets are gaining and equities are lower with yields on Australian 10-year bonds down 22.1 bps to 5.44 % and Japanese 10-year government bonds down 3.1 bps to 1.46 %.

Sydney's S&P ASX 200 is down 175.30 points to 4632.098.

The Japanese Nikkei is down 544.54 points to 11199.07 and the Hang Seng down 635.27 points to 17245.41.

Yields on three-year Australian bonds were up 1.5 bps to 6.24 and the Australian 90-day March 09 contract was up 23.0 ticks to 93.91.

The Euroyen March 09 contract was up 3.0 ticks to 99.19.

The Australian dollar was down 0.55 cents to 0.7992 against the USD and down 0.41 cents to 0.8373 against the Canadian dollar.

Against the yen, the U.S. dollar was down 0.03 points to 104.15 and the Canadian dollar was down 0.22 points to 99.42.

The euro was down 0.90 cents to 1.4350 USD.

All data taken at 11:01 p.m. EDT.

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