Asian stocks were subdued on Monday


reuters-Asian stocks were subdued on Monday, lacking clear direction as Shanghai shares see-sawed in and out of the red after the Chinese markets resumed trading following a four-day long weekend.

Spreadbetters forecast Britain’s FTSE .FTSE, Germany’s DAX .GDAXI and France’s CAC .FCHI opening a touch higher in a rebound from Friday’s steep losses.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.7 percent.

The index had already dropped earlier in the session following Friday’s Wall Street slide, triggered after the August U.S. jobs report failed to give a clear view on the Federal Reserve’s interest rate hike.

Japan’s Nikkei .N225 was down 0.1 percent after hitting a 7-month low. South Korea’s Kospi .KS11 dipped 0.2 percent and Australian stocks shed 0.7 percent.

Chinese stocks once again took center stage when markets reopened after closing over Thursday and Friday as Beijing celebrated 70 years since the end of World War Two.

Shanghai shares .SSEC initially rose as much as 1.8 percent following remarks over the weekend by regulators aimed at calming the market, but the index was last down 0.8 percent after bobbing in and out of the red.

China’s policymakers and regulators tried to soothe jittery markets, promising deeper financial market reforms and stressing the economy was showing signs of stabilizing.

U.S. stock indexes dropped more than 1 percent on Friday after a mixed August jobs report did little to quell investor uncertainty about whether the Federal Reserve will hold off from hiking interest rates this month.

Non-farm payrolls increased 173,000 last month, fewer than the 220,000 that economists polled by Reuters had expected. But the unemployment rate dropped to 5.1 percent, its lowest in more than seven years, and wages accelerated.

“The jobs report itself was good. The U.S. economy is recovering, and it should be good for the Japanese economy if we didn’t have worries about China,” said Yoshihiro Okumura, an analyst at Chibagin Asset Management in Tokyo.

Previously strong expectations that the Fed will tighten this month have weakened somewhat on the global markets turmoil and emerging worries over China’s economy and its potential impact on global growth.

The dollar was on the back foot against its peers with Friday’s U.S. jobs data inadequate to give a definitive clue to the Fed’s rate hike timing.

The U.S. stood at 119.39 yen JPY= after sliding from a peak of 120.19 on Friday. The euro rose 0.1 percent to $1.1143 EUR= following up an overnight bounce from a low of $1.1090.

Marc Chandler, global head of currency strategy at Brown Brothers Harriman in New York, reckoned the dollar could slip back to 118 yen, if not a little further.

“With steep equity losses before the weekend, and the prospects of more volatility from China, which re-opens after being closed September 3-4, leaves the dollar vulnerable to additional losses,” he wrote.

“These concerns likely outweigh the prospects of additional easing by the Bank of Japan, which many continue to see as likely as early as next month.”

The dollar index, a gauge of the greenback’s strength against a basket of key currencies, was little changed at 96.295 .DXY after losing 0.2 percent overnight.

The Australian dollar, used as a liquid proxy of China trades, fell to a fresh 6-1/2-year low of $0.6892 AUD=D4 early on Monday.

Investors have been aggressive sellers of the Aussie in recent weeks, in large part due to heightened concerns about a hard landing for the Chinese economy. China is Australia’s top export market.

In commodities, crude oil fell on a lingering supply glut and as the ambiguous U.S. jobs data clouded global demand prospects.

U.S. crude oil futures CLc1 were down 0.8 percent at $45.70 a barrel and Brent crude dropped 1 percent to $49.14 a barrel LCOc1.

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