Sterling falls to new low against the dollar in Asia trade

The pound has hit a new low in Asian trading as concerns about the UK's vote to leave the European Union continue to weigh on investor confidence.

It touched $1.2798 against the dollar on Wednesday, which is a 31-year low.

US government bond yields also fell to record lows as investors rushed to put money in perceived safe havens.

The falls follow decisions by fund managers, including Standard Life and Aviva, to stop investors withdrawing money from their UK property funds.

They said the high levels of uncertainty caused by the referendum had led to investors rushing to pull their money out.

Investor confidence was further undermined by the Bank of England's warning on Tuesday that there was evidence some of the risks it identified related to Brexit were already emerging.

Disappointing data on the UK services sector and a decline in US factory orders also fuelled pessimism.

'More uncertainty'

Financial markets were shaken by the Brexit vote two weeks ago, with trillions of dollars lost from global equity markets and currencies like the pound suffered steep falls.

They have since recovered some ground on speculation central banks will ramp up stimulus measures to stabilise the markets.

However, investors now face more uncertainty after UK Prime Minister David Cameron, who campaigned for the UK to stay in the EU announced his resignation, leading to a sharply contested ballot to replace him as leader of the Conservative Party and PM.

As a result, there has been a rush to buy up government debt, another safe haven investment, from certain countries.

This includes 10-year US, UK, Swiss and German bonds which have seen their yields at or near their lowest on record.

Yields on Australian and Japanese government bonds have also hit record lows.

High demand tends to push up bond prices, and when the price of bonds rises their yield falls.

Asian markets

Meanwhile, Asian stock markets are falling due to the renewed Brexit concerns.

Japan's benchmark Nikkei 225 has dropped nearly 3% and the broader Topix has shed 2.6% as the yen, another safe haven investment, strengthened against the US dollar.

South Korea's Kospi fell 2% and Australia's S&P/ASX 200 index is down 1.4%.

Hong Kong's Hang Seng fell 1.9% and the Shanghai Composite is 0.4% lower.

Indonesia, India, Singapore, Malaysia and the Philippines stock markets are closed for holidays.

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