Asia shares decline on deadlocked Italy election
wanted to do? Because the market has run so hard we were due for a pull-back," said Michael McCarthy, chief market strategist at CMC Markets. Australian shares last week scaled a 4-1/2-year high.
The yen resumed its retreat after firming sharply on Monday when nervousness about Italy exposed the yen to sharp reversals from its recent steep losses on bets of aggressive reflationary monetary policy in Japan.
The yen traded down 0.6 percent against the dollar at 92.35 after gaining 2 percent to a three-week high of 90.85 on Monday from its intraday low of 94.77 touched earlier in the day, its lowest since May 2010. The yen was also down 0.5 percent against the euro to 120.87 after jumping more than 3 percent to 118.74 on Monday from its day's low of 125.36.
Traders said the plunge in the dollar and the euro against the Japanese currency has provided fresh opportunities to buy these currencies against the yen, with many market players still seeing a weak yen trend continuing.
But the euro's rebound was limited, putting the single currency near its more than six-week low of $1.3047 hit on Monday on jitters about political gridlock in Italy hampering the country's efforts to reform and slash its debts.
"Uncertainty over the Italian election outcome and its impact will certainty keep the euro under strong pressure for some time," said Yuji Saito, director of foreign exchange at Credit Agricole in Tokyo.
"A safety net has been provided over the past year in the euro zone and
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