Asian market stocks had variable performance on Monday, in response to mixed signals from the latest U.S. employment report regarding the health of the world's largest economy.
Japanese stocks faced pressure from a strengthened yen, while optimistic inflation data prompted buying in mainland China and Hong Kong. A dwindling dollar resulted in a record high for gold prices, whereas oil extended losses from last week due to concerns over Chinese demand.
China's Shanghai Composite index rose by 0.74 percent to 3,068.46 as fresh weekend data showed consumer prices in the country rising for the first time since August. The consumer price index exceeded economists' forecasts with an annual 0.7 percent increase in February, alleviating deflation worries in the world’s second-largest economy. However, in the same month, the producer price index dropped 2.7 percent from the previous year, compared to a 2.5 percent drop in the prior month.
Hong Kong's Hang Seng index surged by 1.43 percent to 16,587.57, following reports suggesting that financial establishments may beef up their support for the state-backed property developer, China Vanke. Japanese markets meanwhile slumped, with semiconductor stocks facing heavy selling.
A fortified yen also constrained stocks after revised data indicated that the country had avoided a technical recession, setting the stage for the Bank of Japan to potentially increase interest rates at its policy meeting next week. Bond yields increased in response to rumors that the BOJ is contemplating ending its yield curve control program.
In the midst of this, the Nikkei average fell 2.19 percent to 38,820.49, after surpassing the key 40,000 level for the first time last week. Concurrently, the broader Topix index dropped by 2.20 percent to 2,666.83. Among the significant decliners were Toyota Motor, which lost 3.1 percent, Advantest, which dropped 4.8 percent, and SoftBank, which plummeted by 6 percent.
After consistent strong gains, Seoul stocks notably dropped with the Kospi average falling 0.77 percent to 2,659.84, led by a decrease in semiconductor stocks. Samsung Electronics dipped 1.2 percent and SK Hynix went down by 3.1 percent.
Major mining, banking, and energy stocks led the decline in the Australian market, which also fell back from its record high. The benchmark S&P/ASX 200 fell 1.82 percent to 7,704.20, breaking a three-day winning streak. At the same time, New Zealand's benchmark S&P/NZX 50 index dropped 0.42 percent to 11,873.67.
Contrary to recent trends, U.S. stocks closed lower last Friday. The job data for February conveyed a mixed view on the economic and rate outlook, with conflicting indicators such as stronger-than-expected job creation, a minor increase in unemployment rate, slower wage growth, and marked downward revisions to job growth in the prior two months. In February, non-farm payroll employment surged by 275,000 jobs - more than the expected 200,000 - though December and January figures were revised downward by a total of 167,000. The Nasdaq Composite fell by 1.2 percent, the S&P 500 decreased by 0.7 percent, and the Dow dropped by 0.2 percent.
