Asian stocks down on European debt worries

Asian stock markets slumped in early trading Wednesday, pressured by renewed concerns over the health of European banks following a report that the region's banks may have more risky government debt.

Japan's benchmark Nikkei 225 stock index fell 159.72 points, or 1.7 percent, to 9,066.28. Investors dumped Japanese exporters on a strong yen, which hurts them as it cuts their overseas profits. The yen stood at 83.71 to the dollar in early Tokyo trade from 83.80 yen in New York late Tuesday.

South Korea's Kospi shed 0.3 percent to 1,781.61. Australia's S&P/ASX 200 was down 0.3 percent at 4,600.30.

Sentiment was sluggish after a report in the Wall Street Journal claimed that the EU stress tests of 91 banks in July understated some lenders' holdings of potentially risky debt.

The report sparked worries that Europe's debt crisis could flare up again. Such worries also pressured Wall Street Tuesday as the Dow Jones industrial average dropped 107.24 points, or 1.0 percent, to close at 10,340.69.