Shanghai Composite falls by 2%, CSI 300 index now down by 3% on the day

The fall is led by consumer stocks following the sharp decline seen by Kweichow Moutai - a top liquor maker. The company is set to face a slowdown amid a sluggish outlook moving forward and shares were limit down (>10% loss) before the lunch break earlier.

That's dragging the majority of sectors lower in Chinese equities and it's not making a good backdrop for risk to rebound following the declines on Friday. The brighter spot among risk assets is that the sharp losses here are seen isolated to mainland Chinese stocks only.

Even though the Nikkei has also turned negative on the day heading into the close, there hasn't been any heavy losses sustained in E-minis or other equities in the region so far. And that's keeping yen pairs relatively calm ahead of European trading with USD/JPY at 111.95 currently still knocking on the door of the 112.00 handle.