Northeast Asian equity and currency markets look set to come under further heavy selling pressure this week, as weaknesses in the Japanese and South Korean economies face intensified scrutiny which could have a knock-on effect in already battered Hong Kong. Brokers expect share prices to fall further in Seoul and Tokyo, and the won and yen to continue heading south. Asian declines may trigger more investor jitters around the globe. 'The Nikkei average is basically on its way to re-visiting the post-bubble economy low in the vicinity of 14,000,' one Tokyo broker said. Weakness in the South Korean currency, which was pushed to a series of lows last week against the US dollar as foreign investors deserted the country in droves, could in turn depress the Taiwanese dollar and other regional units, brokers said. A chain-reaction of falling currencies and equity prices, driven by crumbling regional sentiment, would deal a fresh blow to the beleaguered Hang Seng Index. Seapower Securities senior research manager Sunny Chan said: 'The [Hong Kong] market is still vulnerable. The index could lose a further 1,000 to 2,000 points before it is too low for the currency speculators and hedge funds to make money.' On Friday, it closed at 10,104.5 points, after shedding 4.89 per cent in the week. The local blue-chip index has fallen in the past four sessions, haunted by the high interest rates needed to defend the Hong Kong currency peg to the US dollar. Taiwanese share prices, which slipped on Saturday, are also seen as vulnerable to the latest round of instability as the island is one of South Korea's main industrial rivals. Brokers said investors would keep a watchful eye on developments in the United States, where Federal Reserve policy-makers convene on Wednesday to review the country's monetary stance. Signs of a booming economy could induce the Fed to push up US interest rates for a second time this year in a bid to contain inflationary pressures. On Friday, the Dow Jones Industrial Average dropped 101.92 points, or 1.33 per cent, to 7,581.32 after figures were released showing that unemployment had fallen to its lowest level in 24 years, while wages rose. Analysts expect the worst for South Korea and Japan. 'It looks like another regional financial crisis is emerging and that really worries investors,' National Securities' analyst Alex Yang said in Taipei on Saturday. Seoul share prices were savaged and the won tumbled last week as investors fretted about the level of foreign-currency and domestic debt held by the country's corporates. Brokers have speculated that Seoul could be the next recipient of aid from the International Monetary Fund. Government officials have firmly rejected the need for IMF assistance, vowing to prevent the won from hitting 1,000 to the US dollar. It reached 979.90 on Saturday, down 16 per cent this year. Shares posted record falls at the end of last week as investors raced for the exits. In Japan, there are rising concerns that the tentative economic recovery may be grinding to a halt. Financials bore the brunt of the selling last week, on fears over their exposure to slowing Asian economies and a report - later denied - that banks were off-loading their cross-shareholdings. The Nikkei 225 Index plunged to more than 4 per cent on Friday to 15,836.36, its lowest level since July 1995. The yen is trading at a six-month low of 124.3 to the US dollar.