The Hong Kong stock market finished 1.32 per cent lower yesterday as the Japanese yen slipped further against the US dollar and the Indonesian economy dug itself ever deeper into the mire.
The Hang Seng Index shed 126.42 points to finish at 9,411.97 on lacklustre trade of just $3.86 billion.
'If the yen devalues, then the yuan will be next and that will be the end of the world,' one trader said.
Since Friday's close of 134.6 yen to the dollar, the yen has slid well past the 135-yen level over growing concerns about Japan's exposure to Indonesia and the unlikelihood of central bank intervention.
ING Baring Securities sales director James Osborn said that until the Hong Kong market showed signs of stability, investors were unlikely to return.
Investors were made more cautious ahead of today's interest rates meeting of the Federal Reserve's Open Market Committee and tomorrow's protest rallies in Indonesia, he said.
