Wall Street's sharp drop on Friday and the renewed euro-zone woes sent investors scurrying out of riskier stocks into the safe-haven bonds and yen.
"It's very clear to us that this situation in Europe is not going to end well and the now plummeting Euro is trying to tell you that some sort of Greek default and subsequent European bank recapitalisation program is imminent," said Bell Potter managing director Charlie Aitken in Sydney.
Japan's Nikkei Stock Average fell 2.1%, Australia's S&P/ASX 200 dropped 3.0%, and New Zealand's NZX-50 lost 1.6%. Markets in South Korea were closed for a holiday. Dow Jones Industrial Average futures were down 89 points in screen trade.
The euro remained under pressure in Asia after falling sharply on Friday, amid the Greek default worries and apparent divisions in the European Central Bank board.
The surprise resignation on Friday of ECB executive committee member Juergen Stark, who had opposed the bank's move to buy the bonds of struggling euro-zone countries, also hurt market sentiment.
Credit Agricole said the euro is to encounter more selling in the near term, and added that "with a Greek default only a matter of 'when,' not 'if' in the view of many, investors' sentiment is unlikely to improve for now."
The single currency tapped a fresh 10-year low against the yen at ¥104.90 and a seven-month low of $1.3550 against the U.S. dollar in early Asian trade.
In recent trade, the euro was fetching ¥105.40, from ¥105.94 late in New York on Friday, and at $1.3598, from $1.3648. The dollar was at ¥77.50, compared with ¥77.74.
In Tokyo, the yen's spike against the euro sent stocks tumbling, with exporters bearing the brunt of the selloff. The Nikkei plummeted to its lowest level since March 15, at 8529.06 on the open.
Honda Motor was off 3.6%, Sony dropped 3.1% and industrial concern Fanuc lost 3.0%, as investors worried that the global woes would further hurt Japan's recovery from the devastating March 11 natural disasters. Cyclical and growth-sensitive stocks were sold off heavily in Sydney and Wellington.
The Australian market slipped to a four-week low, with major banks down 2.9%-3.4%, and BHP Billiton off 3.0%.
In Wellington, Auckland Airport lost 1.5% and Telecom Corp. gave up 1.4%. Amid the global uncertainty, investors jumped into safe-haven bond investments, with December Japanese government bond futures up 0.20 at 142.71 points.
Nymex crude for October delivery was down $1.04 at $86.20 per barrel on Globex. Spot gold was at $1,847.60 a troy ounce, down $11 from New York on Friday
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