Asia stocks down after rally, Tokyo up on yen move

HONG KONG: Asian shares mostly fell Monday following last week's Europe-inspired rally, but Tokyo was up thanks to another government forex intervention after the yen hit a new record versus the dollar.

While dealers were on a high last week after Thursday's agreement to tackle the European debt crisis the focus has now turned to finding out the details of the deal.

Hong Kong fell 1.03 percent, Sydney was 0.60 percent off, Seoul dipped 0.49 percent and Shanghai edged 0.10 percent lower.

Tokyo was 0.51 percent higher by the break.

The Japanese Nikkei reversed earlier losses after the government stepped into the currency markets again to sell the yen which hit another record high against the dollar.

The dollar rose above 79 yen in midday trade after sinking to a post-war low of 75.32 yen in the morning.

It was the first intervention since August as the government tries to protect the country's exporters, who are hurt by the strong currency which makes their goods expensive overseas.

Finance Minister Jun Azumi on Thursday threatened government intervention in financial markets, complaining that speculators were using Europe's debt crisis as an excuse to push the safe haven yen higher.

However, Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities, said: "The question, as in the past, is sustainability."

Global markets have been on a high since Thursday's eurozone deal, which will see Greece's bondholders take a 50 percent cut on their assets, a boost the European Financial Stability Facility (EFSF) bailout fund, a recapitalisation of the region's banks.

However, markets now want to know how the deal will work. (AFP)