ASIA MARKETS: Asia Stocks Weaken As Cyprus Optimism Fades

By Sarah Turner, MarketWatch

SYDNEY (MarketWatch) -- Asian markets mostly saw losses on Tuesday, as optimism over a financial rescue deal struck between Cyprus and its international lenders proved to be short lived.

Japan's Nikkei Stock Average declined 0.4%, Australia's S&P/ASX 200 index lost 0.9% and South Korea's Kospi edged up 0.2%.

Stocks jumped in the Asia trading day on Monday after Cyprus signed a deal to secure financial aid from its lenders which protected insured deposit holders from paying for the deal.

However, European and U.S. stock markets ended lower on Monday after later reports suggested that deposit holders in other ailing European economies may be at risk in the future. Here's the gloss on those Dutch minister's Cyprus comments.

"The relief rally that followed the 10 billion euros ($13 billion) Cyprus deal made way for growing concerns that this approach may become the 'new norm' for any future bailout of troubled banks," said Matthew Sherwood, head of investment research at Perpetual Investments.

"More importantly, this demonstrates that government funds for bank bailouts are near exhaustion and that the rules can be re-written at any time by any authority," Sherwood added.

The dollar (USDJPY) traded at 94.09 yen early Tuesday, down 4% so far this week as the Japanese unit saw some safe-haven buying.

Weighing on the Japanese index Tuesday were real estate firms, with Tokyu Land Corp. down 3.4% and Heiwa Real Estate Co. down 1.8%.

Exporters were also putting in a weak performance, with Mazda Motor Corp. (7261.TO) down 4.4%, while Sony Corp. (SNE) moved lower by 2.6%.

Amid the losses for Japanese exporters, their Korean rivals advanced, with car maker Hyundai Motor Co. (HYMTF) moving higher by 0.2% and consumer electronics giant Samsung Electronics Co. (SSNLF) rising 0.4%.

Miners dropped sharply in Australian trading, with Rio Tinto Ltd. (RIO) down 2%, Paladin Energy Ltd. , off 3.5%, and PanAust Ltd. lower by 4.4%.

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