Asia stocks ended mostly higher on Tuesday following a pick up in Chinese consumer inflation, but Japanese shares fell on profit-taking.
China's annual consumer inflation rose 2.5 percent in May, faster than a 1.8 percent rise in April. Producer prices fell 1.4 percent on year, but that was still better than April's 2 percent drop.
"There are two important market signals for the Chinese economy out of this report. The first is from the PPI report: industrial overcapacity is a genuine problem. The second signal is from the CPI report: there is negligible slack in the labor market, reflected in rapidly rising costs of labor-intensive services," said Bill Adams, senior international economist at PNC Financial Services.
Shanghai up 1%
Shanghai stocks rose to their highest level in over two weeks, led by financials, after the People's Bank of China cut the reserve ratio requirement (RRR) for rural banks on Monday. Agricultural Bank of China and Bank of Communications rose over 1 percent each while ICBC jumped 2 percent.
Those gains overshadowed news that seven firms launched mainland initial public offerings on Tuesday following a four-month hiatus.
In Hong Kong, China Mobile rallied 1 percent after buying an 18 percent in Thai telco True Corp for $881 million. Citic Resources slumped 10 percent after saying that the group may be affected by the metal financing probe at China's Qingdao Port.
Nikkei falls 0.8%
Japan's benchmark index ended at a one-week low, just one day after rising to a three-month high on profit-taking. Traders were also awaiting details on the government's corporate tax reform plan after economics minister Akira Amari said he wanted to settle the issue this week.
Fast Retailing fell 1.5 percent after announcing will increase prices at its Uniqlo stores by an estimated 5 percent from August.
Kospi gains 1%
Emerging markets gain
Indonesia's Jakarta Composite rallied 1.25 percent following the first presidential debate on Monday in which Jakarta governor Joko Widowi appeared to have scored more points than his opponent.
Meanwhile, Indian stocks finished flat after some profit-taking during the day following Monday's record high.
ASX 0.1% higher
Australian shares started the week higher following Monday's holiday, with the benchmark rising to a one-week high.
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Retailers fell with Pacific Brands down 9 percent and The Reject Shop sinking 12 percent after both firms warned of full year profit declines.