Nikkei Slides 2.3%; Europe Shares Lower

Updated from 2:33 a.m. EDT

By Jeremiah Marquez

HONG KONG -- Most Asian stock markets retreated Monday, with Tokyo's benchmark sliding more than 2% as the dollar remained weak against the yen. Shares in Europe were trading lower.

While the greenback recovered some ground later in the day, Japan's stronger currency weighed on major exporters like Toyota(TM Quote) and Canon(CAJ Quote) amid concerns it would erode the value of their overseas profits. Oil prices fell to near $68 a barrel, while U.S. stock futures pointed to a lower open on Wall Street.

Analysts said the markets seem to be in a short-term holding pattern as investors await more clues about the global economy. Among their chief concerns are Western consumers who've scaled back their spending in the face of growing unemployment, sinking home values and high personal debt.

"The markets are jittery today," said Francis Lun, general manager of Fulbright Securities in Hong Kong. "There's still concern we're ahead of the fundamentals. The exports market hasn't completely recovered and the consumer is still not spending, so there's a lot of worry out there."

In Europe, Britain's FTSE 100 fell 1%, Germany's DAX was off 1.5% and France's CAC-40 dropped 1.5%.

Japan's Nikkei 225 stock average took the day's biggest hit, falling 242.27 points, or 2.3%, to 10,202.06. Toyota, the world's largest car company, lost 2.6% and electronics giant Canon fell 3.4%.

Hong Kong's Hang Seng closed down 1.1%.

Shanghai's market defied the downswing, adding 1.2 percent to 3,026.74.

Looking ahead, investors will be eyeing President Barack Obama's speech Monday about plans to wind down government measures that bailed out debt-laden financial firms last year and to overhaul the country's tattered regulatory regime. He will ask the financial industry to support his overhaul, as well as take responsibility for its failings and learn to police itself. Banks and other financial services companies are expected to pay their employees huge bonuses just a year after being rescued with public money.

Also this week, investors will get some insight into how much U.S. consumers are spending from a government report on August retail sales. They'll also get an indicator of how willing consumers are to borrow money to make those purchases when credit card lender Discover Financial (DFS Quote) reports earnings.

In New York Friday, the Dow Jones Industrial Average fell 22.07, or 0.2%, to 9,605.41 as investors pulled out of the market following a five-day rally left the market at its highest levels in nearly a year.

The broader S&P 500 index fell 1.41, or 0.1%, to 1,042.73, and the Nasdaq composite index fell 3.12, or 0.2%, to 2,080.90.

Prermarket futures in the U.S. were lower suggesting stocks would open lower on Wall Street Monday.

Oil prices dropped in Asia, with benchmark crude for October delivery down 87 cents to $68.42 a barrel. On Friday, the contract tumbled $2.65 to settle at $69.29.

The dollar, which has tanked in recent days, rebounded modestly to 90.69 yen from 90.42 yen. The euro fell to $1.4537 from $1.4597.