The yen edged higher and the Australian dollar skidded to an eight-month low on Monday as investors were spooked by Beijing's decision to hit the mainland property sector with strong curbs, triggering a selloff in Asian equities. China's Shanghai Composite index tumbled 3.2 percent after Beijing announced more property market tightening measures on Friday in a bid to contain housing costs.
The Australian dollar fell to as low as $1.0117, its lowest level in nearly eight months. It last stood at $1.0124, down 0.8 percent from late US trade on Friday. Against the yen, the Aussie dollar slid 0.8 percent to 94.60 yen. The yen, seen as a safe-haven in times of market uncertainty, edged higher against other major currencies as well, with the US dollar slipping 0.2 percent to 93.43 yen.
"There is basically a bit of a risk-off type of move," said Satoshi Okagawa, senior global markets analyst for Sumitomo Mitsui Banking Corporation in Singapore. "(Emerging) Asian currencies and the Australian dollar are weak, and while I'm not sure if you can say definitively that we're seeing risk-off, things aren't looking too good either," he added.
Highlighting the retreat in risky assets, MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.7 percent to a nine-week low. Last week's China manufacturing data "were worse than expected and the latest move on the property sector deepens uncertainty about how funds would flow within the Chinese economy," said Chiyuki Shiraiwa, economist at SMBC Nikko Securities in Tokyo. The yen showed limited reaction to comments from Haruhiko Kuroda, the Japanese government's nominee as the next Bank of Japan governor.
Huge purchases of longer-dated Japanese government bonds is a natural way to ease monetary policy, but central bankers must monitor the side-effects, Kuroda said on Monday during a confirmation hearing in parliament. Kuroda's remarks contained few surprises, said a trader for a Japanese bank in Bangkok.
The euro slipped 0.1 percent to about $1.3009, not very far from Friday's low of $1.2966 set on trading platform EBS, the single currency's lowest level since December 11 and its weakest in more than 2-1/2 months. The dollar index, which measures the greenback's value against a basket of major currencies, stood at 82.321, having hit a high of 82.509 on Friday, its strongest level in more than six months.
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