HONG KONG -- Japanese stocks fell to their lowest level in almost a year, as markets across Asia took a pounding following Friday's steep drop in the U.S.

As the possibility of higher American interest rates fed fears of a slowdown in exports from Asia, there was no short-term end in sight for the decline in Japanese equities, with the June Nikkei futures contract trading at a 1% discount to the cash market. Elsewhere in Asia, real estate companies were also hit, and technology issues were singled out for particular punishment after the

Nasdaq's

sharp fall on Friday.

Japan's key

Nikkei 225

index fell 472.16 points, or 2.8%, to 16,386.01, while the

Topix

index, which includes all shares listed on the

Tokyo Stock Exchange's

first section, fell 55.88 to 1522.49 The

Jasdaq

small-cap index lost 5.29, or 6.1%, to 81.27 while the Nikkei

over-the-counter

index shed 82.13, or 4.5%, to 1745.39.

Sony

(SNE) - Get Report

tumbled 550 yen, or 5%, to 10,280, and

Fujitsu

(FJTSY)

lost 125 or 4% to 2955.

NEC

(NIPNY)

fell 70, or 2% to 2825, while internet investor

Softbank

plunged 2000, or 10.7%, to 16,600.

Telecoms fared nearly as badly as Softbank.

Nippon Telegraph & Telephone

(NTT)

fell 80,000 or 6.25% to 1.2 million, while

NTT DoCoMo

(NMCNY)

plunged 280,000 or 9% to 2.84 million.

Sega

fell 48, or 2.8% to 1670, after the

Nihon Keizai Shimbun

newspaper reported that the company's president would resign to take responsibility for poor sales of the company's

Dreamcast

game consoles. Sega's chairman will reportedly take on the president's job. In the year to March 31, Sega reported its third consecutive net loss.

Hong Kong stocks were also sharply lower, with real estate issues particularly hard-hit, because higher U.S. rates inevitably mean higher rates in Hong Kong due to the Hong Kong dollar's peg to the greenback. The

Hang Seng

index lost 337.53 points, or 2.3%, to 14140.73. Property developer

Sun Hung Kai Properties

fell HK$2.25, or 4.4%, to 49.00. Conglomerate

Hutchison Whampoa

(HUWHY)

fell 3.25 or 3.4% to 91.75, but its parent, real estate developer

Cheung Kong

(CHEUY)

defied the trend and actually rose 0.50 to 73.75. Cheung Kong was hammered last week when Morgan Stanley Capital International announced the company would be removed from the MSCI Hong Kong index.

Market heavyweight

China Telecom

(CHL) - Get Report

lost 2.20 or 4.3% to 48.80, as investors continued to sell in order to raise money for the imminent IPO of the company's competitor,

China Unicom.

In addition, the fact that ChinaTel trades at 130 times earnings may have unsettled some traders watching the global sell-off in Internet and telecom issues. Internet investor

Pacific Century CyberWorks,

which has yet to begin selling its own satellite-delivered broadband access and content, fell 0.65, or 4.3% to 14.45. Banking group

HSBC

(HBC)

fell 0.50 to 83.25.

Singapore's

Straits Times

index fell 61.17 points, or 3.1%, to 1931.25, while Korea's

KOSPI

index tumbled 39.07 points, or 5.35% to 691.61.

Samsung Electronics

fell 11,500 won, or 3.3%, to 333,500. Mobile phone powerhouse

SK Telecom

(SKM) - Get Report

lost 31,000 or 8.1% to 350,000.

In currency trading the dollar weakened slightly to 106.96 yen, because despite the selling of yen by foreigners leaving the stock market, expectations that economic growth will continue to recover in Japan helped the yen fight off any losses that might have occurred. Many in the market expect the yen to trade between 105 and 110 to the dollar until the middle of next month at the earliest, when general elections in Japan are held, and when first-quarter GDP figures are announced.