* Some gains in steelmakers, automakers, tech counters
* Nikkei down 4.5 percent
* U.S. yields may rise more on selling from Japan insurers
* Oil extends losses after Gaddafi regains more control
* Yen drops to session lows on intervention fears
By Saikat Chatterjee
HONG KONG, March 14 (Reuters) - Early losses for Asian
shares deepened on Monday after Japan's massive earthquake sent
investors scurrying to safe haven assets while the yen weakened
on intervention fears.
Japanese stocks were down about 4.5 percent while
bond futures rose as the country battled to prevent a nuclear
catastrophe after the earthquake and tsunami that may have
killed more than 10,000 people.
Seoul shares slid about 0.7 percent despite solid
gains in technology sectors and automakers following news of
production disruption by its Japanese peers while stocks in
Taiwan fell about 1.1 percent.
Heavy losses in Japanese stocks and nervous market sentiment
over developments in Japan's damaged nuclear reactors would
prompt safe haven asset plays in the near term such as weaker
stocks and higher gold prices, Frances Cheung, Asia-ex Japan
strategist at Credit Agricole CIB said.
MORE VOLATILITY SEEN
"There are some investors buying on dips but overall
sentiment is still cautious especially with the nuclear
developments so we might see more volatility this week," said
Cheung referring to efforts by Japanese officials to stem a
broader fallout from the damaged reactors.
The spreading crisis raised qestions over the near-term
outlook of the nuclear fuel sector, hitting shares in
Australia's uranium miners. The broader index was down
nearly a percent.
The broader MSCI index of Asia-Pacific shares outside Japan
dipped after falling nearly 3 percent last
week.
Gold rose by one percent nearing a record high of
$1,444.40 hit last week.
TREASURIES WARY
U.S. yields nursed losses after Friday's spike but investors
grew wary of further selling pressure from Japanese insurers,
who may sell some of their most liquid foreign assets such as
U.S. debt so they can respond to the earthquake.
Japan is the second-biggest holder of U.S. government debt.
Benchmark 10-year notes were at 3.40 percent,
up from 3.36 percent late on Thursday.
Brent crude fell more than $2 to below $112 after
Libyan leader Muammar Gaddafi regained control of some territory
over the weekend in the country's civil war.
Wheat, corn and soy futures weakened as the quake
exacerbated an already-bearish mood circulating across
agricultural commodity markets in the past few weeks. Since
mid-February, the December 2011 CBOT wheat contract has fallen
18 percent.
However, massive reconstruction hopes for Japan pushed
copper prices above a three-month low hit on Friday.
In currency markets, the dollar climbed sharply against the
yen, bouncing off a four-month low around 80.60 yen on
worries that authorities would intervene to weaken the currency.
(Additional reporting by Clement Tan; Editing by Richard
Borsuk)
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