RPT-GLOBAL MARKETS-No US bailout yet sends dollar, shares down
* US policymakers unable to agree on $700 bln plan
* Biggest ever US bank failure adds to gloom
* Asian money markets tighten as crisis spreads
* Central banks offer dollars to ease money markets (Updates prices, adds European outlook)
HONG KONG, Sept 26 (Reuters) - Asian stocks and the U.S. dollar fell while Treasuries rose on Friday after talks over a $700 billion plan to save the financial system hit a snag and the biggest ever U.S. bank failure dashed hopes for a quick recovery.
Major European stock markets were expected to open down as much as 1.9 percent, according to financial bookmakers, and U.S. stock market futures pointed to a lower open on deep uncertainty about the fate of the White House rescue plan.
JPMorgan Chase & Co (JPM.N) bought certain Washington Mutual Inc (WM.N) assets for $1.9 billion after the largest U.S. savings and loan was closed overnight by a U.S. regulator. [ID:nSP335584]
The deal, the latest in the last few weeks that have shaken up the financial sector, showed how unstable the bank industry is and why stakes in agreement on the bailout plan are so high.
The U.S. dollar weakened against the yen and Swiss franc, two currencies associated with stability, as a bipartisan deal to get what is called the Troubled Assets Relief Program turned into a law may have to wait until at least the weekend.
"We'd have to pinpoint dollar weakness on the TARP plan and overnight there has been no progress on that. In fact it seems to be getting bogged down," said Jan Lambregts, head of Asia research with Rabobank Global Financial Markets in Hong Kong.
"The Congress doesn't really want the plan -- no one really wants the plan -- but the alternative is too bad to contemplate."
The dollar was down 0.7 percent against the yen at 105.65 yen JPY= and off 0.3 percent against the Swiss franc at 1.0860 francs CHF=.
The euro was up 0.1 percent to $1.4636 EUR=, cutting earlier gains but still a little more than two cents away from a one-month high hit on Monday.
U.S. Treasury debt prices rose, with the most prominent gains in long-maturity bonds. The 10-year note US10YT=RR rose 19/32 in prices, pushing down the yield to 3.79 percent from 3.84 percent late in New York.
The yield on the 3-month bill slipped 2 basis points to 0.75 percent US3MT=RR as investors continued to pile into the very short-end of the market in search of liquidity and safety. Continued...
