Asia stocks sink on Brexit fear, yen soars as BoJ stands pat

Asian markets sank Thursday after Federal Reserve boss Janet Yellen sounded a warning over a possible British exit from the EU, while the yen soared to a 22-month dollar high as the Bank of Japan refused to pump up its stimulus.

The Fed on Wednesday lowered its growth forecasts for this year and the following two, and flagged interest rates rises to be lower and slower, highlighting increasing concern about the US and global economic outlook.

Her comments dragged New York stocks lower and sent the dollar tumbling against the yen and even the British pound despite fears of Britain leaving the EU.

In a news conference after the Fed kept interest rates unchanged, Yellen voiced confidence in the US economy but said there were concerns about the impact a British exit would have across the world.

"Clearly, this is a very important decision for the United Kingdom and for Europe," she told reporters.

"It is a decision that could have consequences for economic and financial conditions in global financial markets. If it does so, it could have consequences in turn for the US economic outlook."

The news put downward pressure on the dollar, and that was compounded Thursday when Japan's central bank held off boosting its stimulus programme, despite stuttering economic growth at home and uncertainty overseas.

The dollar fell to 103.72 yen after the BoJ wrapped up its two-day policy meeting -- its lowest since August 2014. The euro fell to 116.92 yen, a three-and-a-half-year low.

That hammered Japan's exporters, sending the Nikkei stock index diving more than three percent.

"People were expecting the BoJ to increase (monetary) easing... with growth deteriorating," Tim Condon, head of Asian research at ING Groep NV in Singapore, told Bloomberg News.

- Oil extends slide -

Ryutaro Kono, chief economist for BNP Paribas in Tokyo, said policymakers may have taken a wait-and-see approach, blaming the high yen on EU vote jitters.

Among other markets Hong Kong was down 2.1 percent in the afternoon, Shanghai ended 0.5 percent lower, Seoul sank 0.9 percent and Sydney was also marginally lower.

World markets have been in turmoil over the past week on worries about the global economic outlook and, in recent days, a growing sense that the June 23 referendum will see Britons vote to break away from the European Union.

Despite jitters over next week's vote, the pound edged down against the dollar Thursday morning, sitting at 1.4170 but is still up from a two-month low below $1.41 touched earlier in the week.

Oil prices extended their losses as unrest in Nigeria and wildfires in Canada, which had helped limit output, begin to ease.

US benchmark West Texas Intermediate was down 1.1 percent at $47.47 and Brent shed one percent to $48.48.

WTI is down eight percent from last week's 11-month high, while Brent has lost more than six percent from an eight-month peak.

- Key figures around 0700 GMT -

Tokyo - Nikkei 225: DOWN 3.1 percent at 15,434.14 (close)

Shanghai - Composite: DOWN 0.5 percent at 2,872.82 (close)

Hong Kong - Hang Seng: DOWN 2.3 percent at 20,001.01

Euro/dollar: UP at $1.1264 from $1.1263 late Wednesday

Pound/dollar: DOWN at $1.4170 from $1.4212

Euro/yen: DOWN at 116.92 yen from 119.36 yen

Dollar/yen: DOWN at 103.72 yen from 105.98 yen

New York - DOW: DOWN 0.2 percent at 17,640.17 (close)

London - FTSE 100: UP 0.7 percent at 5,966.80 (close)