Asian investors on Monday struggled to build on last week's gains as profit-takers stepped in while awaiting the next buying catalyst, with eyes on the upcoming release of key US jobs data.

Still, despite worries that the expected surge in economic activity this year will send prices soaring and force central banks to tighten monetary policy, a forecast-beating jump in a closely watched US inflation gauge was taken in stride.

The calm reaction marked a change from recent times, with benchmark 10-year Treasury yields, a key gauge of future interest rates, inching down slightly.

"There is likely more upside to go on the inflation scare front in the months ahead as base effects, the lagged impact of commodity price hikes and bottlenecks continue to feed through, but there are now a few more signs that it will be transitory," AMP Capital's Shane Oliver said.

All three main US indexes ended Friday with small gains, though Asia fluctuated.

Tokyo, Hong Kong, Shanghai, Sydney, Singapore and Manila dipped but there were gains in Seoul, Taipei, Jakarta and Wellington.

There was little reaction to figures indicating growth in China's factor activity slowed slightly in May.

Focus is now on the release of US jobs figures this week, which will provide a fresh update on the state of the world's top economy as it emerges from last year's pandemic-induced collapse.

Patrik Schowitz of JP Morgan Asset Management said: "It still feels like a market looking for direction in the face of uncertainty around the interplay between much-feared inflation and much-hoped-for growth recovery.

"There still seems an extended growth runway ahead as further regions around the globe get the Covid and vaccination situation under control -- nothing we're seeing is really challenging that expectation, although it will take time, especially across some of the major emerging market economies."

Oil prices edged up and are approaching levels not seen since January last year before the pandemic hammered demand. Crude traders are also keeping tabs on a meeting of OPEC and other major producers Tuesday where they will decide on whether or not to lift output as the world economy bounces back.

They will also be looking for any comments on the prospect of Iranian oil returning to the market if Tehran reaches a new nuclear agreement with global powers.

- Key figures around 0230 GMT -

Tokyo - Nikkei 225: DOWN 0.8 percent at 28,928.69 (break)

Hong Kong - Hang Seng Index: DOWN 0.3 percent at 29,040.94

Shanghai - Composite: DOWN 0.2 percent at 3,593.51

Pound/dollar: UP at $1.4199 from $1.4190 at 2030 GMT Friday

Dollar/yen: DOWN at 109.67 from 109.84 yen

Euro/dollar: UP at $1.2199 from $1.2197

Euro/pound: UP at 85.92 pence from 85.91 pence

West Texas Intermediate: UP 0.4 percent at $66.60 per barrel

Brent North Sea crude: UP 0.3 percent at $69.93 per barrel

New York - Dow: UP 0.2 percent at 34,529.45 (close)

London - FTSE 100: FLAT at 7,022.61 (close)

dan/qan

J.P. MORGAN CHASE & CO

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Equity markets mixed as rally stalls, inflation casts shadow
Hong Kong (AFP) May 27, 2021
Stock markets were mixed Thursday as investors took a breather following a recent run-up, while optimism about the global recovery remains shackled by concerns that a surge in inflation will force central banks to rein in monetary policy earlier than flagged. The rollout of vaccines, reopening of economies, trillions of dollars in stimulus and central bank largesse have combined to fuel a rally in world equities since their pandemic-induced collapse at the start of last year. And while that enor ... read more