Asian stocks closed predominantly lower in light trading on Monday, impacted by market closures in China, Hong Kong, and Australia due to public holidays.
The U.S. dollar strengthened in international markets as the euro declined sharply in reaction to political instability in France, triggered by President Emmanuel Macron's call for early legislative elections.
Gold prices dipped below $2,300 per ounce ahead of the Federal Reserve meeting this week, where no updates to monetary policy are anticipated. Conversely, oil prices rose slightly, driven by expectations of higher summer fuel demand in the U.S.
Japanese markets saw significant gains after government data revealed a smaller-than-expected economic contraction for January-March, attributed to upward revisions in capital expenditure. The Nikkei index increased by 0.92 percent, reaching 39,038.16, while the broader Topix index climbed 1 percent to 2,782.49.
A weaker yen boosted export-focused stocks, with Honda Motor and Toyota Motor gaining 2.4 percent and 1.7 percent, respectively. Financial stocks also surged, supported by rising domestic yields. Mitsubishi UFJ Financial and Sumitomo Mitsui Financial both rose approximately 2 percent.
Sharp Corporation's shares jumped 6.3 percent following SoftBank Group's announcement of a new AI data center. SoftBank's shares rose by 2.4 percent.
The Bank of Japan (BOJ) will hold a two-day monetary policy meeting this week, during which the central bank may consider reducing its monthly Japanese Government Bond purchases, currently at approximately 6 trillion yen ($38 billion).
In Seoul, stocks dropped significantly as investors braced for signals from the upcoming Fed meeting. The Kospi index fell by 0.79 percent to 2,701.17. Market leaders Samsung Electronics and LG Chem declined by 2.1 percent and 3 percent, respectively.
New Zealand's S&P/NZX-50 index fell 0.58 percent to 11,787.57, marking its third consecutive decline.
U.S. stocks ended slightly lower on Friday, following a stronger-than-expected jobs report that pushed Treasury yields higher, creating uncertainty about potential Fed interest rate cuts this year.
The benchmark 10-year yield rose by 14 basis points to over 4.4 percent after data showed non-farm payroll employment increased by 272,000 jobs in May, significantly surpassing analysts' expectations of 185,000, and up from 165,000 in April.
Additionally, average hourly earnings exceeded expectations, while the unemployment rate rose to 4 percent, marking its first rise above this level since January 2022.
The S&P 500 fell by 0.1 percent, while both the Dow and the tech-centric Nasdaq Composite declined by around 0.2 percent.
