Asian shares slip as dollar sits at 15-year lows

picture:sacombank

The strong yen continued to pressure Japanese stocks as traders sell the greenback ahead of the likely pump-priming, which would effectively flood the economy with dollars.

Tokyo's Nikkei index fell 0.88 percent by the break as the yen threatened to break through 82 to the dollar again, after it hit 81.39 on Monday, when Japanese markets were closed for public holiday.

The dollar stood at 82.15 yen in morning trade in Tokyo.

However, the dollar has been given some support by Japanese authorities' threat to step into the currency markets for a second time to halt the yen's rise, which hurts the nation's key export market.

Japanese Finance Minister Yoshihiko Noda, fresh from a weekend meeting with fellow financial chiefs of the Group of Seven nations, said: "I explained to the G7 that Japan's previous intervention was aimed at curbing excessive appreciation in the yen that could hurt the Japanese economy.

"G7 members reconfirmed that volatile foreign exchange market moves have a negative impact on the economy and financial markets," Noda said.

Japan stepped into the currency markets on September 15 for the first time since 2004 to weaken the yen and help safeguard a fragile economic recovery.

Masayoshi Yano, senior market analyst at Meiwa Securities, told Dow Jones Newswires: "If the government does not carry out intervention after the dollar falls (again) below 82 yen, the dollar may break below 80."

Regional markets were given little encouragement from Wall Street, where the Dow ended flat as dealers began considering what type of monetary easing measures the US Federal Reserve would take at its policy meeting next month.

Sydney plunged 1.28 percent, Hong Kong and Shanghai were both 0.11 percent down, Seoul fell 0.92 percent and Singapore slipped 0.10 percent. The losses also came a day after the region chalked up healthy gains.

Mark Smith, economist at ANZ bank in Wellington, said results from Intel, JP Morgan and General Electric due to released this week in the United States were expected to be upbeat.

However, he said "the market is more focused on issues raised by currency (mis)alignments and what shape and form the further (quantitative easing) in early November will take."

On oil markets New York's main contract, light sweet crude for delivery in November, was down 63 cents to $81.58 a barrel. Brent North Sea crude for November delivery fell 65 cents to $83.07 a barrel.

Gold opened at $1,351.00-1,352.00 an ounce in Hong Kong, up from Monday's close of $1,348.00-1,349.00.