LONDON (CNNfn) - Asia's leading equity markets fell Tuesday, weakened by renewed political tensions between China and Taiwan. A late rally pared sharp earlier declines in Hong Kong and Singapore.
The benchmark Nikkei 225 in Tokyo ended down 153 points, or 0.8 percent, at 19,390.58 as investors unloaded the technology stocks that had pushed the market higher at the start of the year
In Hong Kong, the blue-chip Hang Seng index recovered ground in a late rally to close down just 0.4 percent at 16,255.17. The Chinese government's use of threats to Taiwan to try to force its neighbor to restart reunification talks earlier sent the Hang Seng as low as 15,776.
Taiwan's Weighted index lost 1.82 percent at 9,731.93
In Singapore, the Straits Times index ended 0.4 percent lower at 2,106.62, lifted by a surge in Singapore Telecom shares.
The yen slipped to three-month lows against the dollar and the euro. Japanese economic planning agency chief Taichi Sakaiya said Tuesday that he was comfortable with the yen's current value. The Japanese currency traded at 111.15 yen per dollar near the end of the session, after earlier weakening to 111.73. The euro peaked at 110.90 yen, while against the dollar it gained 0.5 U.S. cents to reach $0.9929.
Tokyo shares were weaker across the board, with electronics and technology stocks continuing to give up early-year gains. Sony Corp. closed down 4.1 percent at 30,350 yen, after peaking at an all-time high of 33,250 in morning trade.
Electronics makers Hitachi and Toshiba both lost 1.3 percent while Internet investor Softbank tumbled 8.4 percent.
The yen's decline offered no support for auto makers, even as fresh production data released Monday showed buoyant output by the big three manufacturers. Toyota Motor closed down 2.4 percent, Honda Motor lost 1.3 percent and Nissan Motor fell 2.6 percent.
Bank stocks were the only ones to make ground, rebounding from recent weakness caused by planned tax changes. DKB rose 1.3 percent and Sakura Bank added 3.7 percent.
In Hong Kong, China plays suffer early losses after a policy statement from the Chinese government on future relations with Taiwan included the prospect of "military force" to re-establish links with the island state
Blue chips fell back in response, with leading bank HSBC Holdings down 1 percent, Cheung Kong (Holdings) falling 2 percent and takeover target Hong Kong Telecom almost 3 percent lower. Pacific Century CyberWorks, an Internet investment company pursuing HKT, slid 6 percent, and is 23 percent below its record high, set last week.
However, China-related stocks recovered ground in the afternoon session to limit the Hang Seng's decline. China Telecom closed 3 percent higher and conglomerate Citic Pacific added 1.8 percent, while property shares also gained ground.
The Straits Times index's recovery was driven by a 3.4 percent gain in Singapore Telecom after the company - which is also pursuing HKT - outlined plans to spin off some of its Internet assets. That outweighed
a 1.5 percent fall in leading bank DBS Group while Singapore Press Holdings lost 3.4 percent.
Among smaller markets, Bangkok's Set index succumbed to panic selling by retail investors after falling below the 400-point level viewed as an important psychological barrier. The index closed down 7.1 percent at 379.43, its lowest in almost four months
Other exchanges suffered more modest declines. The JSX index in Jakarta ended down 1.6 percent at 583.42, the KLSE Composite in Kuala Lumpur lost 0.6 percent to end at 1,000.83 and the PHS Composite in Manila closed 1.85 percent lower at 1,799.83.
In Sydney, the decline on the All Ordinaries was a more subdued 0.5 percent, as the index fell to at 3,101.20 in quiet trading.
The Kospi in Seoul was one of only two markets in the region to advance, closing up 0.56 percent at 850.02. The BSE-30 in Mumbai closed up 0.11 percent at 5,883.93. 
-- from staff and wire reports
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