The dollar tumbled to new lows against the euro amid ongoing concerns about the US subprime mortgage market.

Technology shares,meanwhile, led falls in Asian stocks following lacklustre results from chipmaker Intel.

US oil prices nudged higher as recovering refinery operations were seen helping whittle down crude stocks, while gold continued to firm on the dollar's poor fortunes.

By 0210 GMT, the MSCI's measure of Asia Pacific stocks excluding Japan dropped 0.3 per cent, but is still up by almost a quarter so far this year.

Tokyo's Nikkei average ended the morning session down 1.1 per cent at 18,009.91, while the broader TOPIX index fell 1 per cent to 1,759.06.

'Investors are locking in profits now, especially in tech stocks, expecting the US market to go down overnight after Intel's results,' said Norihiro Fujito, general manager at Mitsubishi UFJ Securities' investment research and information division.

Intel posted a 44 per cent rise in quarterly profit but gross margins missed its target and shares fell nearly 5 per cent in after-hours trading.

Fujito said US subprime mortgage problems could also bring down the financial sector there after Bear Stearns said two hedge funds that bet heavily on risky subprime loans now have 'very little value'.

Japanese government bonds drifted higher, following a rise in Treasuries and getting a boost from a falling Nikkei.

Tokyo Electric Power (TEPCO) dropped more than 4 per cent after it said it had found some 50 problems at its Kashiwazaki-Kariwa nuclear power plant in Niigata Prefecture after a strong earthquake hit the area.

Hong Kong stocks fell 0.5 per cent, partly on caution that China's slew of economic data this week would show strong inflationary pressure and trigger fresh tightening moves.

South Korea's benchmark KOSPI was flat, pressured by a more than 4 per cent drop in POSCO, which fell on concerns earnings growth is set to slow.

Seoul's market was closed for a public holiday on Tuesday. Share markets in Singapore and Australia were lower on Wednesday.

The Dow Jones industrial average closed at a record, while the Nasdaq rose to a 6-½ year high on a cascade of stronger-than-expected earnings ahead of Intel.

The euro climbed to a record high against the dollar and sterling rose to a 26-year peak versus the US currency. The dollar was pushed lower on concerns troubles in the US mortgage market would spread to other sectors of the economy.

The single European currency climbed to $1.3823, its highest ever.

Sterling rose as high as $2.0504, getting a boost after data showed that the annual core consumer price index in Britain rose to a decade-high 2.0 per cent in June.

The market awaits Federal Reserve chairman Ben Bernanke's view on inflation and any comment he makes about the impact of subprime mortgage defaults on the broader housing market.

Traders sold the dollar against higher-yielding currencies. The Australian dollar briefly rose to an 18-year peak of $0.8762 this morning.

London Brent crude for September, seen as a better benchmark of oil prices at the moment, rose 15 cents to $75.68 a barrel after falling 76 cents a day ago as it retreated further from Monday's $78.40 peak, near last August's record high.

Gold gained from the dollar's slide. Spot gold hit an intraday high of $667.10 an ounce before dipping to $666.00/666.50, higher than $664.60/665.40 late in New York. Reuters