Asian stock and currency markets yesterday tumbled to historic lows as bleak regional economic news and another slide in the yen's value took a heavy toll. The Malaysian, Singaporean, Philippine and Indonesian stock markets plunged another 3 to 5 per cent as selling pressure was maintained throughout the day. 'The markets are all heading one way. It's desperate,' said fund manager Michael Watt, Pacific investment director at Henderson Investors. Japan's Nikkei-225 Index closed down 1.4 per cent, having fallen close to 2 per cent at one stage as banking stocks came under considerable pressure. An assurance by recently appointed Prime Minister Keizo Obuchi that none of Japan's top 19 banks had been insolvent at the end of March failed to boost sentiments. More influential was the Economic Planning Agency's (EPA) monthly report showing Japan's economy limping along at low levels. EPA minister Taichi Sakaiya said: 'The conditions ahead are tough. I think we will have to cope with a lot of hardships before attaining a recovery.' The Malaysian ringgit and Singapore dollar felt the brunt of the speculative selling pressure. For the second consecutive day, Malaysia was the region's biggest stock market casualty, with the Kuala Lumpur Composite Index shedding another 5.25 per cent to end just short of a 10-year low. Singapore's benchmark Straits Times Industrial Index (STII) temporarily broke through the 1,000-point psychological barrier for the first time since December 1988. Technical analysts warned it could be headed towards 800. 'Everything is on a knife-edge,' said Chia Yew Boon, head of research at Santander Investments Securities. 'The fundamentals are lousy.' Singapore's Ministry of Trade and Industry yesterday announced mid-year economic performance figures showing economic growth slowing to just 1.6 per cent in the second quarter, with the manufacturing and commerce sectors posting negative growth. This, coupled with sliding regional currencies, mounting fears of a yuan devaluation and economic and political turmoil in neighbouring Malaysia, proved enough to push the STII over the edge. Lim Eng Hai, Sassoon Securities research chief, said: 'It was just a matter of time before the 1,000-point support level was broken. 'Every bit of economic news coming out has been negative. There has not been one single positive event.' The Philippines' leading stock index fell another 3.8 per cent to a five-year low yesterday. In Bangkok, the SET Index shed another 1.7 per cent, as concerns deepened about the government's ability to mount a successful rescue package for the country's banking industry. Aberdeen Asset Management fund manager Chong Yoon Chou said: 'Everyone's resigned to the fact that Japan's comatose. 'As a result the whole region's markets can be expected to continue drifting downwards.' Jonathan Hazell, treasury economist at Barclays Capital, said: 'There is still considerable downside for regional currencies. We have still not seen the apex.' Barclays is predicting the yen will reach 160 to the US dollar by the end of this year and 175 within a year. This would put enormous pressure on the mainland to devalue the yuan and in turn the Hong Kong dollar. This would no doubt have severe regional repercussions. 'Pressure is building up,' said Mitul Kotecha, treasury economist at Standard Chartered Bank. The Taiwanese stock market was the only exchange to buck yesterday's downward trend, posting a slight gain.