On Monday Asian stocks fell to their lowest in five weeks, after series of weak data out of China raised the spectre of a sharp slowdown in the world's second-biggest economy.
While Japanese markets were shut for a public holiday, Australia's S&P/ASX 200 index shed 0.7 percent, South Korea's KOSPI fell 0.3 percent and Hong Kong's Hang Seng slid 1.1 percent. Mainland Chinese shares were 0.6 percent lower. MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.8 percent to levels last seen on Aug. 8. The index has fallen almost 4 percent in a little over a week, from a near seven-year peak.
Data opened on Saturday showed growth in China's key sectors cooled, with the worst result in the factory output, which grew at the weakest pace in nearly six years in August.
There are indeed worries that Beijing may be reluctant to provide additional incentives for now, although many suspect the Chinese authorities will be forced to do should growth threaten to undershoot the official 7.5 percent target significantly.
The bearish Chinese data has added to worries about a 40-percent slide in iron ore prices which spoilt moods about commodity currencies.
The Australian dollar, considered a liquid proxy for China plays, also took a hammering and tumbled to a six-month low. Not surprisingly,it came in the cross hairs of sellers, briefly dipping below 90 U.S. cents and extending a decline from 94 cents early this month.
The other major currencies were more stable with the greenback holding just below a six-year peak of 107.39 yen set on Friday. The euro was flat at $1.2968 , having last week slumped to a 14-month trough of $1.2859.
There has been strong demand for the US currency as investors positioned for a slightly more hawkish shift from the Federal Reserve this week at its Sept. 16-17 policy meeting.
This has driven U.S. Treasury yields higher, with the 10-year US shooting above 2.6 percent on Friday in its biggest weekly rise in over a year.
Sterling remained on wires just few days out to the Sept. 18 referendum on independence for Scotland, with polls showing both "Yes" and "No" camps pretty much running neck and neck.
The pound remained vulnerable after skidding to a near 10-month low of $1.6052 last week, however, last traded at $1.6244.
Broad U.S. dollar strength coupled with worries about demand knocked crude oil prices lower. U.S. crude fell $1.20 to $91.16 a barrel.
Copper shed 0.7 percent to $6,787.25 a tonne, while gold reached its lowest in eight months at $1,225.30 an ounce.
