European equities fell while the dollar and euro zone debt yields rose this morning as investors speculated the United States could aggressively raise interest rates to calm inflation.
European stocks also weakened after Swedish-Swiss engineering firm ABB revealed accounting problems at its Italian unit. The firm said late on Friday that earnings from its Italian business had been overstated.
Comments from US Federal Reserve officials in recent days have fuelled expectations of a rapid rise in US rates, which is affecting sentiment across regional markets, dealers said.
In the past week Fed officials have said the central bank of the world's biggest economy must raise rates to protect its anti-inflation credibility.
European stocks came under pressure. The FTSE Eurotop 300 index of pan-European blue chips was down 0.88 per cent, while the narrower DJ Euro Stoxx 50 index fell 1.02 per cent.
During the Tokyo session, the Nikkei finished down 0.31 per cent at 11,491.66, adding to Friday's 0.42 per cent fall from a seven-week closing high marked in the previous session.
In the currency markets, the dollar rose to a three-week high against the euro and a one-weak peak against the yen.
The dollar was up a third of a per cent against the euro, at $1.1968 was up 0.6 per cent against the yen, at 110.85 yen.