SINGAPORE -- World stock markets were mostly lower Friday as investors trimmed bets ahead of a U.S. economic growth report and braced for disappointment over the Federal Reserve's expected stimulus measures.In Europe, Britain's FTSE 100 index was off 0.1% at 5,672.64 and France's CAC-40 fell 0.3% to 3,823.47. Germany's DAX shed 0.1% to 6,587.03. Wall Street was set to fall Friday with futures lower. In Asia, the Nikkei 225 stock average closed down 163.58 points, or 1.8%, at 9,202.45. Investor sentiment was undermined in Tokyo by a stronger yen, which hurts exporters as it cuts the value of their repatriated profits. The dollar slumped below 81 yen, nearing a post World War II record low of 79.75 yen set in 1995. Adding to the gloom, Japan's industrial production fell for the fourth straight month in September, underscoring the country's fragile recovery. Factory output tumbled 1.9% from the previous month as makers of cars and electronic devices cut production, much worse than a 0.6% fall forecast by analysts. Investors were also awaiting third-quarter U.S. growth figures due Friday and wrestling with uncertainty over the size and nature of the Fed's widely expected monetary easing early next week. The U.S. central bank is expected to buy Treasury bonds, known as quantitative easing, in a bid to drive interest rates lower, encourage lending and stimulate the U.S. economy. "The market remains fixated on the size of the quantitative easing," Singapore's DBS bank said in a report. DBS said it expects the Fed to announce initial bond purchases of between $200 billion and $300 billion while some investors are looking for a program between $500 billion and $1 trillion. "Herein lies the fear for disappointment," DBS said. The details of any stimulus are expected to be announced when the Fed meeting wraps up Nov. 3. Some analysts expect Asian policymakers will turn to capital controls to help stem a surge of cash into the region's markets that the Fed moves could trigger. The fear is that the wall of money will push Asian currencies even higher, hurting exports, particularly as China's yuan is effectively pegged to the dollar. "Asia is worried about drowning in a sea of cash," HSBC said in a report. "With the Fed set to crank the pump again next week, officials are busy drawing up capital controls to fend off the tide."
South Korea's Kospi lost 1.3% to 1,882.95. Australia's S&P/ASX 200 fell 0.5% to 4,661.60. The benchmark Shanghai Composite Index dropped 0.5% to 2,978.83 and Hong Kong's Hang Seng shed 0.5% to 23,096.32. Shares in India, Taiwan and Indonesia also declined while Singapore and Malaysia gained. In New York on Thursday, the Dow Jones Industrial Average declined 12.33 points, or 0.1%, to close at 11,113.95. In currencies, the dollar fell to 80.72 yen from 81.04 yen in New York late Thursday. The euro slipped to $1.3837 from $1.3925. Benchmark oil for December delivery down 70 cents at $81.48 a barrel in electronic trading on the New York Mercantile Exchange. The contract added 24 cents to settle at $82.18 a barrel on Thursday.