HONG KONG: Asian shares sank on Monday, with Tokyo skidding more than two percent as the yen surged against the dollar ahead of a policy meetings of the US and European central banks.
Tokyo's Nikkei tumbled 2.14 percent after diving almost three percent on Friday, Seoul dropped 0.33 percent and Hong Kong lost 0.42 percent while Shanghai shed 1.04 percent. Sydney was flat.
Wall Street provided a soft lead. The Dow and S&P 500 finished flat and the Nasdaq gained 0.22 percent.
Eyes are on the US Federal Reserve policy meeting this week, which traders hope will provide more clues about the state of the economy and the future of the bank's huge stimulus programme.
Expectations are for the $85-billion-a-month bond-buying to be kept in place for some time to come, keeping demand for the dollar low, which in turn has sent the yen higher. That will be followed by the release of closely watched non-farm payrolls data as well as April-June gross domestic product growth.
The dollar was at 97.81 yen in early trade, against 98.20 yen in New York on Friday. The euro bought $1.3291 and 130.04 yen, compared with $1.3278 and 130.48 yen.
The European Central Bank will also hold a meeting this week, although analysts say policymakers will not be under pressure to lower rates as the eurozone shows small signs of improving and the possibility it could be moving out of recession.
Hong Kong and Shanghai shares were weighed by concerns about the Chinese economy days ahead of the release of manufacturing activity data. Recent figures have pointed to continuing weakness in the world's number two economy and crucial driver of global growth.
On oil markets New York's main contract, West Texas Intermediate for delivery in September, fell 17 cents to $104.53 a barrel, while Brent North Sea crude for September climbed 18 cents to $107.35.
Gold cost $1,326.80 per ounce at 0220 GMT, compared with $1,329.25 late Friday.
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