Asian Shares Fall; Yen Continues to Weaken

Japan's yen extended its slide, hitting a fresh 3� year low, while China led most other shares in Asia down.

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The region started trading after gains on Wall Street, where the Dow Jones Industrial Average on Monday rose for the seventh consecutive session to close at a fresh record high. Sentiment over the U.S. economy got a boost at the end of last week following the release of strong employment data on Friday.

"Expectations of a U.S. economic recovery are strong," said Daisaku Ueno, senior foreign exchange strategist at Mitsubishi UFJ Morgan Stanley. The jobs data "changed the picture for the dollar/yen."

The U.S. dollar continued to rise against the yen, with the greenback recently at �96.55, compared with �96.28 late Monday in New York.

The overnight gains helped stocks start the day higher, but most markets pulled back as the session progressed due to a lack of positive regional catalysts.

Japanese stocks for example opened with a reasonable rise, then moved close to the break-even mark, with the Nikkei last down less than 0.1%. Some exporters continued to benefit from the weaker yen, especially in the technology sector: Canon Inc. rose 2.3% and TDK Corp. added 5.1%.

Also in Tokyo, Japan Tobacco fell 0.4% after the Japanese government said that it would sell part of its stake in the company to the public for �747 billion.

Nippon Steel & Sumitomo Metal jumped 4.8% following a Nikkei report that said the company is making the final arrangements to stop operations of a blast furnace at a major steelwork in order to reduce excess capacity.

Australia's ASX/S&P 200 fell 0.4% after local business conditions weakened slightly in February, according to a survey by National Australia Bank. The data helped pull the market into negative territory after trading flat early in the session.

Stocks in China were weighed down on Tuesday, as investors continued to digest the recent disappointing economic data from Asia's largest economy. The Shanghai Composite fell 0.8% in mainland China and the Hang Seng Index fell 0.1% in Hong Kong.

MTR Corp. fell 1.4% after the Hong Kong rail operator's 2012 net profit fell by 13%, as fewer sales offset an increase in rail and retail income.

Also in Hong Kong, China's largest shipping company China Cosco Holdings fell 5.4% after the company announced that it plans to sell its logistics unit to its state-owned parent.

South Korea's Kospi Composite was down 0.5%.

Write to Daniel Inman at daniel.inman@wsj.com