TOKYO - Asian equities and US stock index futures fell, with South Korean shares tumbling as much as 5 percent, while the dollar gained on safe-haven appeal after news of the death of North Korea leader Kim Jong-il raised fears of regional instability.
The Korean won fell 1.8 percent on the news, announced at 0300 GMT, which financial markets fear could mean instability in northeast Asia because of the unpredictability of a leadership transition in the impoverished, secretive North.
Commodities also fell broadly, as investors reacted by shedding riskier assets in favor of the safe-haven dollar.
"The risk or fear that the death of Kim Jong-il will lead to provocation by North Korea is pressuring selling," said Hiroyuki Fukunaga, CEO of Investrust, in Tokyo. "Right now, there's going to be a sell-off as part of a risk-off."
The key focus will be how the succession proceeds.