Asian markets were mostly lower Monday with many investors stuck to the sidelines as the second quarter winds down. The U.S. dollar recovered from a slide on worries about the push by major emerging countries for a reserve currency alternative.
Asian shares outside Japan have surged 32 percent in the second quarter, which would be the best quarterly gain in 16 years, as investors embraced the region on hopes it would emerge more quickly from the deepest global recession in decades.
Japanese economic figures highlighted this trend. Industrial output jumped a hefty 5.9 percent in Mayfor a third straight month of growth, but forecasts showed that factories expected the recovery to taper off in coming months.
A drop in oil prices pulled down energy-related shares, with Japan's Nippon Oil losing nearly 2 percent. Crude oil prices fell below $69 a barrel on easing tensions in major exporter Nigeria. The U.S. dollar inched higher after being hit on Friday when China's central bank renewed calls for a super-sovereign currency to reduce the U.S. dollar's global domination, saying it was a serious defect in the international system for one currency to tower over all others.
On the sidelines of a meeting of central bankers over the weekend, China and Brazil said they were discussing a currency arrangement to allow exports and importers to settle deals in local currencies, thereby avoiding the dollar.
Japan's Nikkei 225 Average finished down 1 percent with battery maker GS Yuasa ending a recent surge after a brokerage downgrade and Daiwa Securities Group tumbling after announcing a $2.5 billion share sale. Oil extended losses towards $68, helping drag Mitsubishi Corp and other trading houses lower.
South Korea's KOSPI closed 0.4 percent lower, with Kumho Industrial tumbling on worries about potential financial losses from the Daewoo Engineering sale, but shares in Daewoo Engineering spiked, while automakers also outperformed.
Australian shares fell 0.4 percent after a choppy session as moderate losses in global miners BHP Billiton and Rio Tinto dragged on the broader index.
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Hong Kong shares fell 0.4 percent. Stocks hovered as investors clung to the sidelines ahead of the expiration of index futures on Monday and a heavy calendar of key data releases from the U.S. and China later this week. Bucking the trend, CITIC Pacific jumped after Goldman Sachs added the company to its conviction buy list, arguing that the steel-to-property conglomerate's valuation looked attractive compared with Chinese peers.
Singapore's Straits Times Index was flat at the close with a mixed showing by blue chips. Property counter Capitaland led the declines, down 0.5 percent.
China's Shanghai Composite Index was up 1.6 percent, lifted by property and consumer goods sectors, while signs of economic recovery and ample liquidity had analysts betting on a new year-high for the main Shanghai index this week. Property shares led the rise with industry leader China Vanke gaining.