TOPWRAP 2-U.S. auto bailout crashes; stocks, dollar fall

* U.S. talks on auto bailout collapse

* Dollar, Asian stocks tumble

* Japan to announce stimulus package, newspaper says

* South Korea to expand currency swaps with Japan, China

* European Union close to big stimulus package - draft text (For full coverage of the financial crisis click [nCRISIS])

By Paul Tait

SINGAPORE, Dec 12 (Reuters) - U.S. talks on a $14 billion rescue package for America's top auto makers collapsed, renewing fears for a global economy already facing its deepest crisis in decades and sending investors fleeing from risky assets.

The bailout's failure -- for this year at least -- in late-night talks threatened reverberations in the global supply chain and financial markets, as well as raising fears of an industry collapse that would jeopardise countless jobs.

The yen shot to a 13-year high against a falling dollar -- feeding concern Japanese officials would act to stabilise the currency -- and Asian stock markets tumbled.

"It's going to be a very, very bad Christmas for a lot of people based on what takes place here tonight," said U.S. Senate Majority Leader Harry Reid, a Democrat who favoured the bailout.

"I dread looking at Wall Street tomorrow. It's not going to be a pretty sight."

As the Washington talks collapsed, countries and regional blocs elsewhere were pushing forward with their latest efforts to stave off a crisis that has pushed the United States, the euro zone and Japan into recession, brought some banks to their knees and is threatening a sharp rise in global unemployment.

In Asia, Japan was set to unveil a $437 billion stimulus package, the Yomiuri newspaper reported. Prime Minister Taro Aso has scheduled a media conference for 0900 GMT.

South Korea announced currency swaps deals with China and Japan to deepen its pool of dollar liquidity.

The U.S. House of Representatives had agreed to the bailout for the auto makers but it could not be driven through the Senate.

General Motors Corp (GM.N) and Chrysler LLC had sought billions of dollars in immediate aid to avert collapse, while Ford Motor Co (F.N) wanted a hefty line of credit.