Asian markets retreated Monday and the dollar held gains after a blockbuster US jobs report dashed hopes that the Federal Reserve would slash interest rates this month.
Labour Department data showed that despite recent disappointing indicators, the world's top economy continues to show resilience as it created far more posts than expected in June.
The news took traders by surprise and sent all three main indexes on Wall Street falling from record highs, while the dollar bounced against its main peers.
Investors had been hoping the Fed would cut borrowing costs by as much as 50 basis points at its next policy meeting at the end of the month, but Friday's report reduced the chances of that happening.
And Asian investors extended the selling, with Shanghai losing more than two per cent, Hong Kong down almost two per cent and Tokyo off one per cent.
Sydney, Singapore and Mumbai sank more than one per cent. Manila, Wellington, Taipei, Bangkok and Jakarta were also lower.
Seoul sank 2.2 per cent, hit by a simmering trade row between South Korea and Japan.
Tokyo last week imposed restrictions on exports used by South Korea's tech companies in a dispute over court rulings linked to Japan's wartime forced labour policy.
Samsung fell 2.8 per cent and LG Display sank almost five per cent.
"Markets remain convinced the Fed will cut rates at the end of the month," said OANDA senior market analyst Edward Moya.
"But the strong labour market has many questioning whether we will see just two rate cuts in 2019 and not what some call the required three to see US stocks make another 3-5 per cent push higher into uncharted territory."
He added that the focus will now turn on Fed boss Jerome Powell's congressional testimony this week, with investors hoping he will provide some forward guidance on the bank's plans.
"The testimony this week will be crucial around how they are seeing the evolution of the US economy," Anne Anderson, at UBS Asset Management, told Bloomberg TV.
Also up this week is the release of minutes from the Fed's June meeting, while US and Chinese officials are working to schedule top-level trade talks.
On currency markets, the dollar maintained Friday's gains against the yen, pound and euro.
And it surged more than three per cent on the Turkish lira after President Recep Tayyip Erdogan sacked the head of the country's central bank following months of tensions over high borrowing costs.
Erdogan, who is battling to boost the struggling economy, has repeatedly railed against high interest rates and called for them to be lowered to stimulate growth.
The removal of Murat Cetinkaya at the weekend fuelled speculation the bank will slash borrowing costs.
Win Thin, global head of currency strategy at Brown Brothers Harriman & Co, wrote in a note: "Deputy governor Murat Uysal was named as the replacement, though we all know who really controls monetary policy now."
In early trade London, Paris and Frankfurt all fell 0.2 per cent.
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