TOKYO, Feb 12 (Reuters) - Asian shares fell for a sixth straight session on Friday as concerns about the health of European banks further threatened a global economy already under strain from falling oil prices and slowdowns in China and other emerging markets.
The prices of yen, gold and liquid government bonds of favoured countries soared as investors rushed to traditional safe-haven assets.
"The markets are clearly starting to price in a sharp slowdown in the world economy and even a recession in the United States," said Tsuyoshi Shimizu, chief strategist at Mizuho Asset Management.
"I do not expect a collapse or major financial crisis like the Lehman crisis but it will take some before market sentiment will improve," he added.
MSCI's index of Asia-Pacific shares outside Japan fell 0.8 percent.
Japan's Nikkei fell 5.4 percent to a 15-month low and posted a weekly loss of 11.1 percent, its biggest since October 2008, as this week's sudden spike in the yen took most investors by surprise.
"It is hard to find a bottom for stocks when the yen is strengthening this much. It is hard to become bullish on the market in the near future," said Masaki Uchida, executive director of equity investment at JPMorgan Asset Management.
"But the valuation of some (Japanese) bank shares is extremely cheap. So for long-term investors, it could be a good level to buy," he added.
European shares are expected to rebound, however, after big falls earlier this week, with spread-betters expecting Britain's FTSE to rise 2.0 percent and German's DAX and France's CAC to gain 1.3 percent.
The FTSEurofirst 300 index of top European shares sank 3.7 percent to its lowest level in 2-1/2 years.
Financial shares led losses in Australia and Hong Kong, falling 1.6 percent and 1.8 percent though their declines are still modest compared to peers in Europe and the US.
"We have been hit by a steady spate of bad news since the year began and I think the markets will remain in a state of flux in the near term until we see global bank shares stabilising," said Francois Perrin, portfolio manager for East Capital Asia in Hong Kong.
MSCI's broadest gauge of stock markets fell 0.6 percent in Asia on Friday, hitting a fresh low since June 2013.
It has fallen fell more than 20 percent below its record high last May, confirming global stocks are in a bear market.
On Wall Street, the U.S. benchmark S&P 500 fell 1.23 percent to 1,829.08, its lowest close in almost two years and down 10.5 percent for the year.
Financial counters led the losses globally as disappointing earnings from Societe Generale added to the gloomy mood brought on by poor results from Deutsche Bank last month.
Banks in Europe ended 6.3 percent lower, while the S&P financial index dropped 3 percent.
Stress in the financial sector is stoking worries that funding conditions for some companies may tighten, even as many of the world's central banks pump in funds through unorthodox measures.
A funding crunch could be a death knell for some firms, especially those in the energy sector which have struggled to make ends meet as oil trades at around a quarter of its value just a few years ago.
In a worrying sign that Europe's debt problems could reappear, the Portuguese 10-year bond yield surged above 4 percent for the first time since 2014.
That is a clear departure from last year when investors, hunting for yield, were buying up debt from Portugal and other indebted countries.
In contrast, investors are now flocking to more liquid, and higher-rated bonds.
The 10-year U.S. Treasuries yield fell to as low as 1.530 percent, a low last seen in August 2012, which is just before the Fed started its third round of quantitative easing. It stood at 1.657 percent in early Asian trade.
Federal funds rate futures <0#FF:> almost completely priced out the chance of a rate hike.
As the dollar's relative yield advantage erodes further, the strengthening yen touched 110.985 to the dollar on Thursday, rising almost 10 percent from its six-week low on Jan. 29, when the Bank of Japan introduced negative interest rates.
The currency last stood at 112.10 yen, hardly showing any reaction after Japanese Finance Minister Taro Aso stepped up his verbal intervention on Friday, saying he would take appropriate action as needed.
The euro also attracted some safe-haven flows to trade at $1.1304, having hit a near four-month high of $1.1377 on Thursday.
Gold surged to one-year high of $1,262.90 per ounce on Thursday, rising over four percent in its biggest daily percentage gain since September 2013. It last stood at $1,237.5.
U.S. crude futures rose to $27.44 per barrel, up 4.7 percent from late U.S. levels, helped by comments from an OPEC energy minister sparking hopes of a coordinated production cut.
The futures contract on Thursday hit a near 13-year low of $26.05 on Thursday.
International benchmark Brent futures rose 4.5 percent to $31.40. (Additional Reporting by Hideyuki Sano; Editing by Eric Meijer and Kim Coghill)