(Corrects in first line and in text that Asia stocks ex-Japan fell for the 9th straight day, not the 8th)

SINGAPORE - Asian stocks fell for the ninth straight day on Wednesday on fears that China's heightened efforts to rein in soaring credit growth could hamper the global economic recovery.

European stocks were set to follow Asia lower, with financial spreadbetters expecting key indexes in Britain <.FTSE>, Germany <.GDAXI> and France <.FCHI> to open as much as 0.6 percent lower, while U.S. stock futures were little changed.

Investors were cautious ahead of the conclusion of a two-day policy meeting by the U.S. Federal Reserve later in the day.

The meeting is expected to yield little in terms of a near-term policy shift. But traders will scour a Fed statement afterwards for clues on how much longer it may leave its ultra-low interest rates and easy money policy in place, and for updates on the health of the U.S. economy.

The meeting is taking place amid a fierce Senate debate over whether Chairman Ben Bernanke should be appointed for a second term, which has also weighed on investor confidence this week.

The euro fell to a nine-month low of 125.31 yen as investors continued to cut risky trades amid a host of unsettling factors.

Besides worries that Chinese imports may slow as policymakers try to keep the economy from overheating, investors have been plagued by worries about Greece's high debt levels and a proposal from the White House that could break up some huge investment banks, which could slash their profits.

Data on Tuesday showed U.S. consumer confidence in January hit its highest level in nearly a year and a half, but a closely watched housing index showed an unexpected decline in November prices, giving a mixed view of its economic recovery.

The MSCI index of Asia Pacific stocks outside Japan <.MIAPJ0000PUS> fell 1 percent on Wednesday, surrendering brief early gains. The index has lost around 9 percent in the past two weeks, nearing the 10 percent level that is typically used to define a stock market correction.

The index slid 2 percent on Tuesday to its lowest in two months after China implemented a rise in bank reserve requirements to curb loan growth.

China's largest bank, ICBC <1398.HK>, said on Wednesday it has stopped rolling over some loans after a surge in credit at the start of the year, in the latest evidence that banks may finally be heeding a government-directed clampdown.

Japan's Nikkei average <.N225> fell 0.7 percent to its lowest in five weeks, while South Korean stocks <.KS11> shed 0.7 percent to a seven-week low with sentiment weighed by reports North and South Korean forces exchanged artillery fire.

Many investors had been pricing in a smoother and stronger economic rebound this year, which would justify higher share valuations.

Now that questions are growing about the pace and depth of a recovery, share prices are highly vulnerable to a correction, especially after many global indexes have rallied more than 60 percent from lows seen in March last year.

Tech shares, which helped lead the strong global equities rally over the last year, have been among the hardest hit by profit taking in recent sessions as investors fear demand for flat screen TVs and other gadgets may weaken if the global recovery stumbles.

In Seoul, LG Electronics Inc <066570.KS> fell almost 1.9 percent to an eight-week low after posting a weaker-than-expected quarterly net profit. Taiwan's tech-heavy index <.TWII> dropped 0.5 percent to a two-month closing low, after slumping 3.5 percent on Tuesday, on fears that China's tightening measures will curb the island's exports to the mainland.

Analysts believe much of the fears over China's tightening are overdone, saying Beijing will largely stick to a pro-growth stance even as it tries to head off inflation risks and boom-bust swings in the economy.

It is highly unlikely, in my opinion, that Beijing will drive the economy into a growth recession just to contain inflation, Stephen Jen, managing director of macroeconomics and currencies at Bluegold Capital Management, said in a note.

Nevertheless, shares in Shanghai and Hong Kong remained under heavy pressure.

The Shanghai Composite Index <.SSEC> fell 1.1 percent, closing below the key psychological support level of 3,000 points for the first time since October, despite upbeat earnings estimates from two major banks. Hong Kong's Hang Seng index <.HSI> lost 0.8 percent.

CURRENCIES

The yen <.JPY>, seen as a safer haven in times of market turmoil, firmed broadly currencies as investors dumped high-risk assets. The U.S. dollar fell 0.4 percent to 89.25 yen, but rose 0.2 percent against a basket of major currencies.

However, the high-yielding Australian dollar rose to $0.9045 after fourth-quarter inflation rose faster than expected as the cost of housing, recreation and food all climbed.

The data set the stage for a fourth straight increase in interest rates by the central bank at a meeting next week.

Gold prices steadied near $1,100 an ounce, supported by consistent retail demand from Asia, while oil futures prices fell 10 cents to $74.62 a barrel.

(Reporting by Kevin Yao; Editing by Kim Coghill)

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