Asian stocks declined on Monday as hot inflation data from the United States stoked concerns the Federal Reserve may prolong its rate tightening cycle.
An unexpected acceleration in January of the personal consumption expenditures price index, the Fed's favored inflation gauge, boosted Treasury yields and sent investors fleeing riskier assets.
Oil prices fell on recession fears and a firmer dollar, while gold neared a two-month low.
The Fed is still very much focused on reducing inflation without collapsing demand and growth. It is feared that continued monetary policy tightening could lead to a so-called hard landing.
Chinese shares fluctuated before closing a tad lower. The benchmark Shanghai Composite index slid 0.28 percent to 3,258.03 while Hong Kong's Hang Seng index ended 0.33 percent lower at 19,943.51.
Japanese shares fell slightly, dragged down by tech stocks. The Nikkei average slipped 0.11 percent to 27,423.96 while the broader Topix index closed 0.22 percent higher at 1,992.78.
Advantest, Tokyo Electron and SoftBank Group all fell around 2 percent. Gaming company Nintendo shed 1.9 percent after a downgrade by Citi.
The yen traded marginally higher versus the dollar after Bank of Japan Governor nominee Kazuo Ueda said he had ideas on how the central bank could exit its massive stimulus.
Seoul stocks declined as hotter-than-expected U.S. inflation data weighed on tech and biotechnology stocks. The Kospi average settled 0.87 percent lower at 2,402.64.
Australian and New Zealand markets fell sharply as 1-year bond yields rose on concerns the Fed will keep on raising rates.
Australia's benchmark S&P/ASX 200 fell 1.12 percent to 7,224.80 as weak commodity prices weighed on mining and energy stocks. The broader All Ordinaries index closed 1.24 percent lower at 7.419.60.
Across the Tasman, New Zealand's benchmark S&P/NZX-50 index dropped 0.94 percent to close at 11,793.33.
New Zealand's total volume of retail sales fell 4 percent in the December 2022 quarter compared with the same period last year, official data showed earlier today.
U.S. stocks fell sharply on Friday and logged their biggest weekly losses in more than two months, as higher January inflation and strong consumer spending figures raised fresh concerns about the outlook for interest rates. Traders largely shrugged off improved housing and consumer sentiment data.
The Dow gave up 1 percent to reach a two-month closing low and the S&P 500 dropped 1.1 percent to its lowest closing level in over a month while the tech-heavy Nasdaq Composite gave up 1.7 percent.
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