SINGAPORE (Reuters) - 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 <.SSEC> 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 U.S. 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 U.S. 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 <.MIAPJ0000PUS> 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 comments that have come out today are in line with expectations and have not triggered renewed selling of the yen. They didn't contain any big disappointments either," the trader said.
Kuroda, president of the Asian Development Bank and an advocate of aggressive monetary easing, would replace incumbent Masaaki Shirakawa, who is due to leave office on March 19.
EURO REMAINS UNDER PRESSURE
The euro hovered near a 2-1/2 month low while the dollar stayed close to a six-month high versus a basket of currencies as signs of improvement in the U.S. economy stood in stark contrast to a series of weak euro zone data.
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 <.DXY>, having hit a high of 82.509 on Friday, its strongest level in more than six months.
Broad U.S. spending cuts that automatically kicked in on Friday and threatens to dampen economic growth did little to curb the dollar, which was supported by data released on Friday that showed a pick-up in U.S. manufacturing activity.
On the other hand, data out of the euro zone painted a bleak picture, with business surveys released on Friday showing that European manufacturing appeared no closer to recovery in February, while official data showed that unemployment in the currency union hit a new high of 11.9 percent in January.
"The U.S. is not looking particularly good, but in comparison (to the euro zone) it's looking somewhat better," said Rob Ryan, strategist for RBS in Singapore.
(Additional reporting by Chikako Mogi in Tokyo; Editing by Shri Navaratnam)
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