Asian markets tumbled sharply in early trading on Monday, hurt by data suggesting debt-strapped Greece’s attempts at austerity were not yielding results and a weakening economic picture in Europe.

Japan’s Nikkei 225 fell 2.3 per cent to 8,503.88, with a government survey showing an improvement in business confidence among Japanese manufacturers doing little to nudge markets back to life.

Markets in mainland China and South Korea were closed for national holidays.

A deeper-than-expected recession prevented Greece from meeting this year’s deficit target of 7.8 per cent, the government said over the weekend.

Greece’s deficit for 2011-2012 is expected to reach 8.5 per cent of gross domestic product, or 18.69 billion ($25.2 billion).

Meanwhile, inflation jumped to a startling 3 per cent in September in the 17 countries that use the euro. The increase was a surprise that makes it less likely the European Central Bank will cut interest rates this week to head off a possible recession.

The rate reported Friday from the European Union’s statistics agency was the highest since October 2008 and represented a big increase from August’s 2.5 per cent.

The ECB, the chief monetary authority for the euro countries, has come under pressure to cut interest rates soon to ward off mounting signs of recession in the euro zone economy.

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