Asian shares fell on Monday as a sharp slowdown in US jobs growth raised concerns about the strength of the world's largest economy, prompting investors to curb risk exposure ahead of more US data and earnings as well as figures from China this week.
Friday's data showed US payrolls grew by 120,000 in March, far below the expected gain of 203,000 jobs for the smallest rise since October, keeping the door open for the Federal Reserve to provide more monetary support to the fragile economy.
Industrial commodities such as copper and oil fell on growth worries while the potential for more Fed easing helped gold rebound but pressured the dollar.
MSCI's broadest index of Asia Pacific shares outside Japan slipped as much as 0.8% near a four-week low hit last week. US stock futures fell more than 1% on Friday after the data.
Japan's Nikkei average slid as much as 1.6% to a one-month low, with a firmer yen also dampening sentiment.
"Price actions after the jobs data show that markets had been excessively pricing in the US economic recovery and must now fill the gap between the reality and prices built on perceived strength of the economy," said Naohiro Niimura, a partner at research and consulting firm Market Risk Advisory Co.
"Markets will continue to focus on global data this week to gauge what price levels would match the real economy. With questions raised about the pace of US growth, the resurfacing probability for further Fed stimulus will support risk assets," he said.
China's annual inflation spiked unexpectedly in March to 3.6%, above a 3.3% rise forecast, data showed on Monday, but Beijing may not change the view that price pressures are in retreat and support for a slowing economy is the top priority. Producer prices eased 0.3% on the year, compared with a 0.2% fall forecast.
"We see that pork prices have come down a bit so we think this is a short-term rebound, the trend is still headed lower," said Li Wei, an economist at Standard Chartered in Shanghai.
Some Asian markets, including Australia and Hong Kong, and European markets remain closed on Monday.
Demand Outlook Softens
Data due this week from China, the world's second-largest economy after the United States, also include first-quarter gross domestic product and trade balance.
"The weak US data has revived hopes that the Fed could again consider additional easing measures, and investors are also looking forward to similar action from China with it expected to post a trade deficit this week," said Gwak Jung-bo, an analyst at Samsung Securities.
Shanghai copper fell as much as 0.9% earlier on Monday before inching up 0.3%, but oil was weighed by demand growth concerns, as well as easing worries about supply disruptions.
Brent crude slipped more than $1 on Monday to as low as $122.17 from Thursday's settlement at $123.43 per barrel as Iran agreed to resume talks with top world powers this week on the country's nuclear programme, raising hopes of a peaceful end to the standoff that has rattled the oil market for months.
US oil slipped as low as $101.87 from Thursday's settlement at $103.31 a barrel. Oil markets were closed on Friday due to Good Friday.
Spot gold was up 0.6% at $1,639.80 an ounce.
The dollar extended its loss against the yen on Monday to hit a one-month low of 81.19 yen, but was up 0.2% against the euro at $1.3058.
The dollar may still be pressured as currency speculators trimmed their bets in favour of the unit in the latest week, while net shorts on the yen shrank slightly from the previous week. To be short a currency is to bet it will decline in value, while being long is a view its value will rise.
Barclays Capital analysts said while the nonfarm payrolls data undershot expectations, "job growth in cyclical sectors - manufacturing, and leisure and hospitality - remained relatively strong, suggesting that it is too early to conclude that employment growth has shifted to a lower trend."
US markets will focus on the beginning of the earnings season, with earnings growth expected to be 3.2% for the first quarter, but that figure falls to 1.8% on the year when excluding Apple, the world's biggest company by market value.
