Asian markets fell sharply on Monday while and the euro took a beating after a poor US jobs report added to fears that the world's largest economy is facing a renewed recession.
Stocks were down across the board, following Wall Street's lead, as investors piled into bonds, gold and other safe havens, seeking shelter from the gathering economic clouds.
Tokyo dived 1.86 per cent, or 166.28 points, to 8,784.46, Sydney shed 2.38 per cent, or 100.9 points, to 4,141.9 and Seoul plummeted 4.39 per cent, or 81.92 points, to 1,785.83.
In afternoon trade Hong Kong tumbled 2.58 per cent and Shanghai was 1.78 per cent lower, with traders citing fears about persistent inflation in the Chinese economy and its possible dampening effect on growth.
Markets in Asia were taking their lead from Wall Street's performance on Friday, where the Dow Jones Industrial Average fell 2.20 per cent to 11,240.26 on dismal August employment figures.
A meager 17,000 private-sector jobs were added in the US economy, down from a revised 156,000 in July. But that was offset by 17,000 jobs shed by government, figures revealed.
The Labor Department said the unemployment rate remained unchanged at 9.1 per cent from July. The number of unemployed people was essentially unchanged, at 14 million.
The jobs data for August were the worst since September 2010, when the economy shed more than twice the number of jobs it created. The pace of job growth remains far below the numbers needed to reduce the high unemployment rate.
"Global growth prospects are in doubt, and nervous investors are likely to dump shares in favour of 'safer havens' such as gold and bonds," said Michael McCarthy, chief market strategist at CMC Markets in Sydney.
"This (US jobs report) is likely to bring further calls for quantitative easing, despite the Federal Reserve's apparent aversion," he said, according to Dow Jones Newswires.
On Friday in the United States bond prices surged. The yield on the 10-year Treasury note fell to 2.00 per cent from 2.15 per cent late Thursday, while that on the 30-year bond dropped to 3.31 per cent from 3.51 per cent.
Bond prices and yields move in opposite directions.
Gold started the week at $1,877-$1,878 an ounce in Hong Kong, well up on its Friday close of $1,852.00-$1,853.00.
The euro dropped to $1.4134 in Tokyo trade from $1.4203 in New York late Friday. The European common currency also eased to 108.50 yen from 109.09 yen.
The greenback was at 0.7850 Swiss francs compared with 0.7885. It fell to 76.75 against the yen, from 76.82.
The euro fetched 1.1100 against the Swiss franc, from 1.1210 late Friday in New York.
The euro took the brunt of selling on Friday after the EU and International Monetary Fund left a critical audit of Greek finances unfinished saying more budget work was needed, and the government admitted its deficit target was in trouble.
Finance Minister Evangelos Venizelos conceded that Greece would have to revise its public deficit target for this year, a key condition for continued funding from the 110-billion-euro ($158-billion) bailout loan agreed last year by the EU, the IMF and the European Central Bank.
Also negative for the euro was news that German Chancellor Angela Merkel's Christian Democrats (CDU) suffered an election defeat in her home state Sunday, with the news unsettling the market, dealers said.
Crude fell on the US jobs numbers, with traders concerned that a slowdown in the economy of the world's largest oil consumer heralds a dip in demand.
New York's main contract, light sweet crude for delivery in October, dropped 91 cents to $85.54 per barrel.
Brent North Sea crude for October delivery shed 73 cents to $111.60.
In other markets:
-- Taipei tumbled 2.65 per cent, or 205.49 points, to 7,551.57.
Leading smartphone maker HTC fell 4.59 per cent to Tw$707.0 while Taiwan Semiconductor Manufacturing Co lost 1.33 per cent to Tw$66.6.
-- Manila closed 0.24 per cent, or 10.35 points, lower at 4,382.56.
Philippine Long Distance Telephone Co. slipped 0.66 per cent to 2,402 pesos while SM Investments Corp. dropped 0.53 per cent to 555 pesos.
But Lepanto Consolidated Mining bucked, rising 4.76 per cent to 1.54 pesos.
-- Wellington fell 0.31 per cent, or 10.09 points, to 3,293.13.