AAP
Asian markets fell as Spain's debt troubles added to already downbeat sentiment caused by weak Chinese growth data and fading optimism over the US economy.
The euro slipped further as investors became more risk-averse, while the yuan sank against the dollar on the first trading day since Beijing widened the trading band for the Chinese currency.
Tokyo fell 1.74 per cent, or 167.35 points, to 9,470.64 and Seoul shed 0.81 per cent, or 16.28 points, to 1,992.63 while Sydney ended 0.49 per cent, or 21.0 points, off at 4,302.3.
Hong Kong closed 0.44 per cent, or 90.40 points, lower at 20,610.64 while Shanghai ended flat, edging down 2.13 points to 2,357.03.
Regional markets followed losses on Wall Street and in Europe on Friday after data showed Spanish banks borrowed a record €227.6 billion ($A288.48 billion) in emergency cheap loans from the European Central Bank in March.
The figures show the weak confidence in the country's financial sector, with commercial banks turning to the ECB because they are struggling to borrow on the interbank market.
Spain and Italy have come under scrutiny in recent weeks amid fears they could be the next economies to succumb to the same fate as Greece, Ireland and Portugal and need a bailout.
The yield on Spanish 10-year bonds jumped to 5.956 per cent on Friday from 5.802 per cent on Thursday, while the yield on Italian 10-year bonds rose to 5.513 per cent from 5.394 per cent.
On Wall Street the Dow dived 1.05 per cent, the S&P 500 shed 1.25 per cent and the tech-rich Nasdaq fell 1.45 per cent.
And in Europe London's FTSE 100 shed 1.03 per cent, the Frankfurt DAX dropped 2.36 per cent and Paris's CAC 40 fell 2.47 per cent. Milan's FTSE Mib index dived 3.43 per cent and Madrid shed 3.58 per cent.
Optimism over the US economy - which was driven by several months of strong jobs growth - has waned in recent weeks and a bigger-than-expected drop in the University of Michigan's consumer sentiment index added to anxieties on Friday.
Figures also showed the number of people claiming unemployment benefit rose for a second straight week.
In Shanghai the yuan fell against the US dollar, in line with global dollar strength caused by dealers seeking safer assets.
It was also weighed by Friday's data showing Chinese economic growth slowed to 8.1 per cent in the first three months of the year, the weakest since the second quarter of 2009.
In the afternoon, the dollar bought 6.3142 yuan, up from 6.3030 late on Friday. The greenback hit an intraday high of 6.3250 earlier.
The fall came after the People's Bank of China said it would allow the yuan to move one per cent either side of a state-set parity rate, up from 0.5 per cent.
Saturday's announcement is a major step towards adopting market-oriented reforms and comes after leaders have faced pressure from China's trade partners to let the unit move more freely.
Beijing has been accused of keeping the currency artificially low to boost its crucial export sector.
"There appears to be increasing evidence that reform-minded leaders are now in the ascendancy" in China, said Sydney-based Ric Spooner, chief market analyst at CMC Markets in a note.
"The move to allow greater volatility in the currency, following the recent relaxation of restrictions on capital flows fits this scenario," he said, according to Dow Jones Newswires.
In early European trade the euro bought $1.3010 and 104.95 yen compared with $1.3078 and 105.83 yen in New York late on Friday.
The dollar was at 80.65 yen against 80.91 yen in New York.
On oil markets New York's main contract, West Texas Intermediate crude for delivery in May, was down 49 cents to $102.17 34 per barrel while Brent North Sea crude for June shed $1.21 to $119.83-120.00.
Gold was at $1,650.11 an ounce at 1030 GMT (2030 AEST) compared with $1,644.95 earlier in the day.
In other markets:
- Singapore climbed 0.14 per cent, or 4.30 points, to 2,992.12.
Oil rig maker Keppel Corp gained 1.22 per cent to $Sg11.60 while commodities firm Olam International was down 0.43 per cent at $Sg2.31.
- Taipei fell 0.75 per cent, or 58.41 points, to 7,729.86.
Leading smartphone maker HTC lost 2.82 per cent to end at $Tw517.0 while Formosa Plastics was 2.20 per cent lower at $Tw84.5.
- Wellington closed 0.39 per cent, or 13.67 points, lower at 3,473.50.
Fletcher Building rose 0.2 per cent to $NZ6.21 and Contact Energy was down 0.6 per cent at $NZ4.75.
- Manila gained 0.40 per cent, or 20.16 points, to 5,117.46.
Philippine Long Distance Telephone fell 1.1 per cent to 2,574 pesos and San Miguel was off 0.35 per cent at 113.50 pesos.
- Jakarta fell 0.31 per cent, or 12.70 points, to 4,146.58.
Bank Mandiri lost 0.7 per cent to end at 6,950 rupiah, gold and nickel miner Aneka Tambang slipped 2.3 per cent to 1,710 rupiah, and instant noodle maker Indofood Sukses Makmur was down 1.6 per cent at 4,675 rupiah.
- Kuala Lumpur slipped 0.35 per cent, or 5.61 points, to 1,597.51.
Plantation firm Sime Darby fell 0.10 per cent to 9.88 ringgit, while telecoms company Axiata Group shed 0.19 per cent to 5.39 ringgit. Financial firm Public Bank gained 0.29 per cent to 13.78 ringgit.
- Mumbai rose 0.33 per cent or 56.44 points to 17,150.95.
Analysts expect the central bank to cut rates for the first time in three years when it meets for its monetary policy meeting on Tuesday, in an effort to spur growth even as March inflation was up at 6.9 per cent from a year earlier.
Infosys ended down 1.41 per cent at 2,369.65 rupees after the firm announced a lower-than-expected growth forecast for the new financial year last week.
The firm said its quarterly profit rose 27 per cent to 23.16 billion rupees ($A439.94 million) in the three months to March.
