"Specifically what needs to be done is really up to the Japanese government but I appeal to Japan to do what is necessary and get on with it," said Hong Kong Chief executive Tung Chee-hwa. "A stable yen and a strong Japanese economy is very, very important for the well being of all," he added.

Hong Kong share prices plunged 5.7 per cent to languish at a more than three-year low as interbank interest rates were jacked up, Thai shares dipped as much, South Korean stocks fell 4.8 per cent to a 11-year low.

In Tokyo, Japanese shares ended below the key 15,000 level for the first time in five months, while Singapore stocks ended 3.5 per cent lower.

Malaysian sharesplunged 4.3 percent and in Manila, the stock market dropped 4.4percent, while the Shanghai bourse fell to an all-time low.

"The US dollar stands to strengthen further. And many emerging markets stand to be tested yet again," said John Llewellyn, global Chief economist with Lehman Brothers in Hong Kong. "If matters were to stop there it would be grave enough. But investors are now also seeing the real possibility of serious credit losses out of Asia. Time to battel the hatches," he added.

Hong Kong's key Hang Seng index lost 452.94 points to close at 7,462.50 - its lowest since January 16, 1995 when the key barometer stood at 7,504.24.

"The market is extremely, extremely oversold. There is no sign of a rebound, with the economy contracting," said Alex Tang, research director at Core Pacific-Yamai chi International. He warned that "unless the government comes up with some measures to boost investor's confidence, there is long, long period of correction" ahead of the market. The market dived 14.6 per centin the previous week amid worries over the Yen weakness and a possible devaluation of the Chinese Yuan.

Tang also said the rapid fall in the Yen would intensify pressure on Beijing to consider devaluing the Yuan to stave off an erosion of the mainland's export compettiveness. Dealers said the yen's slide was increasing pressure on regional currencies.

TOKYO: Japan's share prices closed below the crucial 15,000-point barrier for the first time in five months as the yen plunged further against the dollar, brokers said. The key Nikkei stock average of 225 selected issues on the Tokyo Stock Exchangefell 197.16 points, or 1.3 per cent, to end the session at 14,825.17. The broader Topix index of all first section issues was down 10.04 points to 1,167.21. Share prices were under pressure from the outset, dragged down by the yen which fell hard and finally broke through the 146-yen level against the dollar after the stock market closed.

That also triggered falls across Asian share markets, also hurt by weakgrowth figures announced on Friday which showed Japan is gripped by recession.

"The Hang Seng index is falling sharply, and this also pressured sentiment in the market," the broker said. But the downside of share prices was firm at around 14,800 points on the Nikkei 225 index, supported by buying by public funds, brokers said. "

Vietnam to prop local currency; may ban use of US dollars

The Vietnam government plans to ban the use of US Dollars in a bid to boost the stability of the Dong. Deputy Governor of the State Bank of Vietnam Do Que Luong told the Vietnam Investment Review that restaurants, shops and hotels will strive to establish the dong as the only legal currency. "The regulation has not come out yet, but its main content should pave the way for the Dong to become Vietnam's only legal currency," he was quoted as saying.

An official from the State Bank said the government had "given general approval" to the State Bank's petition, but was seeking further consultation with the bank, theMinistry of Justice and other related ministries. The move comes against repeated denials by the State Bank that Vietnam intends to devalue its currency. Through periodic de facto devaluations, the bank has allowed the Dong to depreciate against the US dollar by about 10 per cent since last October.