Asian equity markets rose on Monday following record closes on Wall Street last week but trading volumes were thin with Japanese markets shut for the Emperor's Birthday.
Higher borrowing costs in China continued to worry investors after the benchmark seven-day repo rate jumped to 9.6 percent. The move came despite news late Friday that the People's Bank of China injected $49 billion into the financial system over a three-day period.
"The issue of tighter interbank liquidity has been a key focus a few times this year and given the seasonality this should not surprise anyone, but with the lack of major weekend newsflow, perhaps this issue has been given greater attention from markets than it would have done otherwise," said Chris Weston, chief market strategist at IG.
(Read more: Don't sweat the spike in China interbank rates)