Jitters about a global credit squeeze and uncertainty about the fallout from the US subprime mortgage crisis will continue to roil markets, analysts say.

"We're going to see a pretty volatile ride over the next couple of months, with the risks on the downside," said Shane Oliver, head of investment strategy at AMP Capital in Australia.

The MSCI's measure of Asia Pacific stocks excluding Japan has fallen more than 10 percent from the record high set on July 24 - suffering its biggest decline since the 18 percent slide between May and early June last year.

A fall of at least 10 percent is usually seen as a correction, but not a meltdown. In fact, the index is still up more than 10 percent so far this year.

The European Central Bank and US Federal Reserve, along with some Asian central banks, have injected funds into money markets amid a global rush to cash and other liquid assets.

Japan stocks may rise Japanese stocks may rise this week after closing at their lowest in more than five months, with investors likely to pick up shares with strong earnings prospects.

"The market is likely to rebound," said Ken Masuda at Shinko Securities. "It is overshooting in a downward direction."

Aussie investors nervous Another week of choppy trade is expected in Australia, as worries about the global credit squeeze continue to rattle sentiment.

"The nervousness has been brought on by the perception that many more financial institutions may come out in the future to say they have been making losses on the back of the subprime problems," said Martin Arnold, an equities economist at CommSec.

Investors will also be monitoring the Reserve Bank of Australia's quarterly statement on monetary policy for signals on its next move on interest rates after last Wednesday's decision to lift them to a decade-high 6.5 percent.

Watching brief in S Korea In a week devoid of local economic data and with the corporate reporting season winding down, investors will keep a close watch on any new developments on the US subprime turmoil.

"We've seen a series of reports from big global investment banks about fund losses ... I don't think it's nearing an end any time soon," said Han Dong Wook, an analyst at Hyundai Securities.

Taiwan stocks likely to fall Taiwanese shares are seen likely to extend their fall amid jitters over the US subprime mortgage crisis.

"Market sentiment is very nervous as it seems the subprime crisis is escalating faster than expected, prompting heavy selling in stocks," said Jerry Chang at National Securities Investment Trust, adding the main TAIEX could drop to 8,400 points.

On Friday, the index ended 2.74 percent lower at 8,931.31, marking its biggest percentage fall in a week.

Sell-off a risk in Singapore Stocks could fall in the week ahead as tighter supply of credit funds fuel selling activity in the markets, some analysts said.

"We would expect Asian equities to suffer further selling pressure," Sean Darby, a regional strategist from Nomura, said. Darby said that he expects regional financial stocks to face "indiscriminate selling pressure" because banks are likely to sell these stocks to offset their losses in other assets such as subprime debt.

Local strength aids India Indian shares are seen edgy after the global credit squeeze rocked markets globally, but local factors such as strong domestic growth could limit losses.

"I think there is still some more pain left. The US subprime mortgage crisis may not have any direct impact on our economy per se, but liquidity gets affected," said Ketan Dedhia of local brokerage Nalanda Securities. REUTERS