Asian stocks fell sharply and the U.S. dollar fell to levels not seen for three years against the Japanese yen on Monday, on speculation the Federal Reserve board may lower rates further to soften a possible recession. At the start of trading in Europe, most stocks were showing moderate losses reports the New York Times.

The Nikkei 225 Stock Average slumped 610.84, or 4.49 percent to end trade at 12,992.18, the lowest close since Jan. 23. Japanese stocks have fallen approximately 15 percent since the start of the year. The Hang Seng Index was down about 3 percent in late trading; it has also declined 15 percent this year, while the CSI 300 Index has fallen 11 percent.

The dollar fell to 102.72 yen at one stage, the lowest level since Jan. 28, 2005, and dipped to $1.5228 against the Euro, near the $1.5239 set on Friday, which was the lowest since the common European currency’s debut in January 1999.

Concerns United States consumers may no longer be able to afford exports from the region also weighed on Asian stock markets. Exports of finished products to the United States, such as televisions and video cameras, make up between 5 percent and 10 percent of the Gross Domestic Product of the countries of East and South East Asia, said Yutaka Harada, chief economist with Daiwa Institute of Research in Tokyo.

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