| TOKYO, March 3
TOKYO, March 3 Escalating political tensions in
Ukraine pressured Asian stocks on Monday, forcing anxious
investors to cut their exposure to riskier assets in favour of
traditional safe haven bets such as the Japanese yen and Swiss
Ukraine mobilised for war on Sunday and Washington
threatened to isolate Russia economically, after President
Vladimir Putin declared he had the right to invade his
neighbour, in the biggest confrontation between Russia and the
West since the Cold War.
Russian forces have already bloodlessly seized Crimea, an
isolated Black Sea peninsula where Moscow has a naval base.
The tensions come at a nervous time for markets, hit by
signs of slowing growth in China, the tapering of the U.S.
Federal Reserve's stimulus and stress in emerging market assets.
Australian shares were off 0.2 percent, and MSCI's
broadest index of Asia-Pacific shares outside Japan
was also down by a similar margin. U.S. stock
futures fell 0.7 percent.
The turmoil in Ukraine also sent Japan's Nikkei futures down more than one percent with investors seeking
shelter in government bonds. U.S. Treasury-note futures
prices gained 16/32.
"It's a reaction to the escalation in tension in Ukraine
over the weekend ... the traditional risk proxies are getting
hit, and the safe havens are getting bid," said ANZ currency
strategist Sam Tuck in Auckland.
The dollar dropped to as low as 101.30 yen in early
trade, its weakest since Feb. 6, and last traded at 101.57 yen,
about 0.2 percent below levels late last week.
The euro also shed 0.2 percent against the dollar to $1.3778
, as the euro zone economy is seen as vulnerable because
of its dependence on gas supplies from Russia via Ukraine.
Against the Swiss franc, the single currency dropped to a
14-month low of 1.2116 franc.
Concerns about gas supply also boosted Brent crude,
the European oil benchmark, more than one percent to $110.20
Putting further strain on riskier assets, a government
survey on Saturday showed activity in China's factory sector
slowed to an 8-month low in February, reinforcing signs of a
modest slowdown in the world's second biggest economy.
The official Purchasing Managers' Index edged down to 50.2
in February from January's 50.5, the National Bureau of
Statistics said on Saturday, just ahead of market expectations