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By Bloomberg View

Asian stocks tumbled as investors sought shelter in haven assets while they weighed a possible Greek exit from the euro zone. Shares in Shanghai sank even after the central bank cut interest rates.

Japan’s Topix index dropped 2.5 percent as the yen jumped 1.1 percent against the dollar and 2.3 percent versus the euro. The MSCI Asia Pacific Index lost 1.9 percent to 145.03 as of 2:16 p.m. in Hong Kong, as more than 16 shares fell for each that rose. The Shanghai Composite Index slumped 1.3 percent, having swung from losses as great as 7.6 percent and a 2.5 percent gain.

“The key thing is that this is untested and people are selling on that uncertainty,” Chad Padowitz, Melbourne-based chief investment officer at Wingate Asset Management Ltd., said by phone. “Markets have been accustomed to the can being kicked down the road indefinitely and this may be that the buck stops here. It’s a very fluid situation and it’s never really been tested in this way before.”

Greece will shut banks and impose capital controls on Monday after Prime Minister Alexis Tsipras’ decision to call a July 5 referendum on the proposed bailout package spurred savers to start withdrawing money at the weekend. The European Central Bank froze the level of emergency aid available to Greek lenders Sunday. Mainland Chinese investors focused on local stimulus efforts, with policy makers reducing the benchmark lending rate for the fourth time since November after the steepest two-week stock selloff since 1996.

‘Dangerous Game’

“Chinese policy makers must be quite aware that cutting in response to short-term moves in markets is a dangerous game, but I do think they’ve eased because of underlying fundamental concerns,” Frederic Neumann, co-head of Asian economic research at HSBC Holdings Plc in Hong Kong, told Bloomberg TV. “We’ve already seen the earlier rate cuts not really gaining the traction we wanted, and the economic data hasn’t really improved all that much.”

Losses across Asia were broad-based on Monday, with all 10 industry groups on the regional measure retreating. Financial and technology shares led declines. Tencent Holdings Ltd., Toyota Motor Corp. and Commonwealth Bank of Australia were among the biggest drags on the gauge.

Australia’s S&P/ASX 200 Index dropped 2.2 percent. Slater & Gordon Ltd. tumbled a record 25 percent after the world’s first publicly-listed law firm said it identified an historical error in its U.K. reporting.

Regional Gauges

The Hang Seng Index slid 2.6 percent, on course for the biggest loss since February 2014. New Zealand’s NZX 50 Index fell 0.9 percent. South Korea’s Kospi index retreated 1.4 percent, while Singapore’s Straits Times Index lost 1.4 percent and India’s S&P BSE Sensex Index dropped 1.9 percent.

Greece will probably have to exit the euro zone, according to Mohamed El-Erian, the former chief executive at Pacific Investment Management Co.

“There’s an 85 percent probability that Greece will be forced to leave the euro zone” in the next few weeks, El-Erian said in an interview from New York. “What we are seeing here is what economists call the sudden stop, when the payment system stops. The logic of a sudden stop is a massive economic contraction, social unrest and it’s going to make continued membership of the euro zone very difficult for Greece.”

E-mini futures on the Standard & Poor’s 500 Index sank 1.3 percent.