* MSCI APXJ down nearly 1 pct after three weeks of gains
* Euro hovers within sight of a record low against Swiss franc
* Australian shares tumble 1.6% on carbon emission tax plan
* U.S. bonds, gold shine as risk appetite dims
By Saikat Chatterjee
HONG KONG, July 11 (Reuters) - The euro weakened in Asia on Monday ahead of an emergency meeting among European policymakers on the sovereign debt crisis while equities snapped three consecutive weeks of gains on weak data from the world's two biggest economies.
The single currency held near a record low against the Swiss franc on growing worries that the debt crisis was now beginning to infect the continent's big economies such as Italy -- the region's third biggest.
Markets have barely begun recovering from an extended period of volatility in the first half of 2011, when concerns around slowing growth in China, an extended slump in the U.S. and worrisome news from the euro zone have begun to resurface, deterring demand for risky assets once again.
Australian stocks was the region's worst performer, shedding 1.6 percent, after the government unveiled a plan to tax carbon emissions from the nation's worst polluters, sending shares of coal miners, steel and airlines such as Macarthur Coal , BlueScope Steel and Virgin Australia tumbling.
Japanese shares fell 0.7 percent after hefty gains last week, with banks bearing the brunt of the losses.
In Europe, stock index futures point to a lower open with STOXX Europe 50
futures
However, steep declines may be unlikely before the earning season kicks off with Alcoa this week, as most Asian markets are trading above the day's lows with some scattered buying seen in defensive counters like utilities.
"The correction has been relatively mild and suggests that investors are not all that bearish as they could have been, suggesting a preference towards buying on dips rather than selling into strength," said Khiem Do, chairman of Asia multi-asset team at Barings Asset Management in Hong Kong.
"This is a good day for bargain hunting, especially among investors who haven't participated in the rally earlier."
Before Monday's drop of 1.2 percent, the MSCI index of Asia-Pacific shares outside Japan had gained for three consecutive weeks as investors bet that the second half held better prospects for risky assets than the first.
But Friday's much-awaited U.S. non-farm payrolls data revealed the economy created only 18,000 jobs in June, well short of an expected 90,000, dashing optimism that the economy was emerging from a soft patch.
Adding to worries on the global economy, data showed annual inflation in China accelerated to a three-year high in June while import growth slowed to its a two-year low. {ID:nL3E7I901B]
NUANCED APPROACH
In currency markets, the euro held around the $1.42 line on some light short-covering after falling to a two-week low of $1.4187 in early Asian trade with some technical support seen around the $1.4150 line.
Against the safe-haven Swiss franc, the common currency slipped back towards a record low of 1.1808 hit in late June on EBS.
European Council President Herman Van Rompuy has called an emergency meeting of top officials dealing with the euro zone debt crisis for Monday morning, reflecting concern that the crisis could spread to Italy, the region's third largest economy.
Even as investors fretted about its fiscal health, pushing Italian bond yields to euro lifetime highs on Friday, the Financial Times reported that some EU leaders were considering allowing a selective default by Athens to put its debt on a more sustainable footing.
Taking a leaf out of the weaker tone in equities, most Asian currencies slipped against the dollar with the weak payrolls data implying policymakers would be reluctant to use currency gains to counter rising inflation in the face of weak external demand.
Frederic Neumann, co-head of Asian economics at HSBC says price pressures in much of Asia is driven by local demand which exchange rate swings can do little to counter, suggesting central banks would rely on more traditional methods of policy tightening such as interest rates.
Reduced demand for risk boosted prices of perceived safe-haven assets like U.S. Treasuries and gold with yields on 10-year U.S. notes steadying at 3.01 percent on Monday from 3.18 percent barely a week ago. Gold held above the $1540 an ounce line.
Oil trended lower with U.S. crude
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http://blogs.reuters.com/hedgehub (Additional reporting by Ian Chua in SYDNEY;Editing by Ramya Venugopal)