Asian shares near three-year lows as China worries linger
By Hideyuki Sano
TOKYO (Reuters) - Asian shares looked set to struggle on Tuesday to defend the three-year trough hit last month as investors sought more signs of stability in China's slowing economy and volatile financial markets.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS on Monday closed near the three-year low hit two weeks ago. In Japan, stock futures suggest Japan's Nikkei .N225 is likely to post slim gains.
Chinese shares .SSEC fell on Monday after a long weekend with tighter futures trading rules and supportive comments by China's central bank governor failing to stem selling pressure.
Also highlighting the sheer size of Beijing's market intervention to halt a slide in the yuan, China's foreign exchange reserves posted their biggest monthly fall on record, $94 billion, in August, data showed on Monday.
"The fall was larger than market expectations... Coupled with other data, it shows that the Chinese authorities have been intervening to support the yuan as capital outflow continues," said Shin Kadota, chief FX strategist at Barclays in Tokyo.
Tuesday will see China's trade data, which is expected to show slowdown in both imports and exports.
Many Asian and emerging economy currencies faced pressure also as Friday's U.S. employment data did not erase the possibility that the U.S. Federal Reserve will raise interest rates later this year.
Malaysia's ringgit MYR= plumbed 17-year low and even the South Korean won KRW=KFTC weakened to four-year lows. Continued...