Asian markets pared morning losses, but still closed broadly lower in the afternoon session Monday, with exporters hit hard on concerns the U.S. economy may be heading into a recession. Japan and South Korea both closed over 2% lower.
Data on Friday showing U.S. payrolls shrank in August for the first time in four years suggested that a credit squeeze stemming from problems in the U.S. subprime mortgage market is beginning to stifle growth in Asia's top export market. This also stoked expectations for a hefty Federal Reserve rate cut this month.
Japan's Nikkei 225Average ended down 2.2% after worse-than-expected U.S. and Japanese economic data took a toll, with exporters such as Sony hit especially hard by a stronger yen. Shares were sold across the board after Wall Street tumbled on Friday. Real estate firms such as Mitsui Fudosan extended last week's losses on continuing worries about a slower property market.
South Korea's KOSPI finished down 2.6% -- its worst fall in three weeks -- as exporters slid after unexpectedly weak U.S. jobs data raised concerns about the outlook for South Korea's second-biggest overseas market. LG.Philips LCD fell 4.9% while Hyundai Motor lost 4.3%.