Asian markets tumbled on Monday and the euro sank as eurozone fears returned on news that Cyprus was planning to tax bank depositors as part of a controversial bailout.
Wall Street also provided a weak lead, with the Dow seeing its first loss after a 10-day rally as data pointed to ongoing softness in the US economy.
Tokyo’s benchmark Nikkei index fell 2.71 percent, or 340.32 points, to end at 12,220.63.
“Even though the bailout of Cyprus (and subsequent levy on Cypriot bank deposits) will be put to a vote, the situation could very well lead to a selloff in the euro and a more risk-off investor stance globally,” David Baran, co-CEO of asset manager Symphony Partners, told Dow Jones Newswires.
“But given the expectations of the new Bank of Japan leadership, the euro is likely to fall more against the dollar than against the yen.”
He added: “Japanese equities, despite their recent rise, are nowhere near their all-time highs as are US stocks.”
Japan’s parliament on Friday approved a new central bank management team widely expected to usher in more aggressive monetary easing to stoke the world’s third-biggest economy.
The stronger yen hit exporters’ shares, with Nissan down 3.45 percent to 951 yen and rival automaker Honda falling 3.40 percent to 3,690 yen. Sony tumbled 6.77 percent to 1,555 yen.
Sharp slipped 2.53 percent to 307 yen after saying a badly needed capital injection from US chipmaker Qualcomm had been delayed as the two sides hammer out details of the pact.
Panasonic firmed 0.58 percent to 692 yen on the back of media reports that the embattled electronics giant plans to scale down its money-losing television business and withdraw from manufacturing plasma displays.
The Sydney market slipped 2.05 percent, or 104.8 points, to 5,015.4, a two-week low, while Seoul ended 0.92 percent lower, sliding 18.32 points to 1,968.18.
Hong Kong lost 2.00 percent, or 449.75 points, to end at 22,083.36 and Shanghai shed 1.68 percent, or 38.38 points, to 2,240.02.
Investors have been spooked by news that Cyprus agreed to a levy of up to 10 percent on bank depositors as part of a deal with fellow eurozone countries and international creditors in order to qualify for a $13 billion bailout.
Deposits of more than 100,000 euros ($129,000) will be hit with a 9.9 percent charge and a 6.75 percent levy will be imposed for anything below that threshold. The proposal must still be passed by parliament.
In early European trading shares in London, Paris and Frankfurt slumped between 1.5 percent and 2.0 percent.
On currency markets the euro fell to $1.2957 and 123.05 yen from $1.3075 and 124.61 yen in New York Friday. However, it clawed back some early losses in Asia that saw it fall to $1.2902 and 121.76 yen.
The dollar dropped to 94.95 yen from 95.26 yen, although it received some measure of support from expectations that the new leaders of the Bank of Japan will unveil a fresh round of monetary easing to jumpstart the economy.
Oil prices fell, with New York’s main contract, light sweet crude for delivery in April, dropping 85 cents to $92.60 a barrel in the afternoon and Brent North Sea crude for May delivery shedding $1.22 to $108.60.
Gold was at $1,602.80 an ounce at 1025 GMT compared with $1,592.60 late Friday.
In other markets:
— Singapore fell 0.90 percent, or 29.58 points, to 3,256.47.
Real estate giant Capitaland gained 1.77 percent to Sg$3.46 while United Overseas Bank shed 0.45 percent to Sg$19.81.
— Taipei slumped 1.47 percent, or 116.15 points, to 7,811.34.
Taiwan Semiconductor Manufacturing Co. was 2.4 percent lower at Tw$100.5, while leading smartphone maker HTC rose 2.3 percent to Tw$240.0.
— Manila lost 1.78 percent, or 118.42 points, to 6,536.18.
Philippine Long Distance Telephone slipped 1.8 percent to 2,790 pesos and SM Investments plunged 4.2 percent to 1,033 pesos.
— Wellington fell 1.05 percent, or 46.03 points, to 4,341.02.
Fletcher Building eased 3.83 percent to NZ$8.80 and Contact Energy was down 1.25 percent at NZ$5.52 but Telecom rose 2.24 percent to NZ$2.28.
— Jakarta eased 0.34 percent, or 16.50 points, to 4,802.83.
Cigarette producer Gudang Garam fell 1.62 percent to 48,450 rupiah, Indah Kiat Pulp & Paper slid 1.11 percent to 890 rupiah, and retailer Ramayana Lestari Sentosa dipped 0.74 percent to 1,340 rupiah.
— Kuala Lumpur slipped 0.39 percent, or 6.28 points, to 1,621.36.
YTL Corp fell 4.8 percent to 1.60 and UEM Land shed 2.0 percent to 2.48.
— Bangkok lost 0.41 percent, or 6.48 points, to 1,591.65.
Bangkok Land Public Co. dropped 5.61 percent to 2.02 baht but Thai Airways International jumped 7.62 percent to 28.25 baht.
— Mumbai fell 0.69 percent, or 134.36 points, to 19,293.20.
Coal India, the world’s largest coal miner, fell 5.41 percent to 302.7 rupees while passenger car giant Maruti Suzuki fell 2.98 percent to 1,363.15 rupees.