Asian markets mostly fell Monday after a forecast-busting US jobs report and comments by Federal Reserve boss Jerome Powell shattered any remaining hopes for a March interest rate cut.
Decision-makers left traders disappointed last week when they said after their latest meeting they were unlikely to loosen policy at their next gathering.
There were still some rumblings of a change in view if the non-farm payrolls data came in below expectations, but they were soon extinguished Friday by the highest reading in a year, while December's figure was ramped up.
The figures showed the labour market and world's biggest economy remained robust despite borrowing costs sitting at two-decade highs, giving little room to the Fed to cut even as inflation comes down.
That was followed by the airing Sunday of an interview with Powell in which he said the bank wanted to see more data.
The "danger of moving too soon is that the job's not quite done, and that the really good readings we've had for the last six months somehow turn out not to be a true indicator of where inflation's heading", he said according to a transcript from CBS.
"The prudent thing to do is to, is to just give it some time and see that the data continue to confirm that inflation is moving down to two percent in a sustainable way," he said in the interview, which was conducted before the jobs report was released.
The chances of a March reduction plunged to 20 percent after the reading, down from around 40 percent Thursday, according to Bloomberg News. They had been about 80 percent at the start of the year.
"Initially, markets were anticipating six cuts starting in March," said Stephen Innes at SPI Asset Management.
"However, Powell's recent remarks suggest such an early move was improbable. Combined with a robust January jobs report, hopes of an early spring adjustment have moved from improbable to impossible."
And Yardeni Research president Ed Yardeni added that officials would likely continue to push back against market speculation for five cuts before the end of the year.
Still, Wall Street ended Friday with more big gains for all three main indexes, pushing the S&P 500 to a fresh record thanks to a rally in tech giants Meta and Amazon in the wake of strong earnings.
The advance in New York was fuelled by optimism that the economy is not likely to fall into recession, while rates are also still expected to come down.
But most of Asia struggled again, with Hong Kong and Shanghai extending a sell-off fuelled by growing concerns about the Chinese economy.
Investors were unmoved by pledges from officials Sunday to prevent wild fluctuations in stocks, with the China Securities Regulatory Commission vowing to guide more medium- and long-term funds into the market.
They provided few concrete plans, and observers said the move was unlikely to help turn sentiment around.
"The statement sought to stabilise investor sentiment, but didn't touch on fundamental problems including a lack of confidence and huge economic uncertainty," Shen Meng, at investment bank Chanson & Co, said.
"Those issues are the causes of abnormal market fluctuation."
There were also losses in Sydney, Seoul, Singapore and Wellington.
But Tokyo rose as the dollar rallied against the yen to boost exporters.
The greenback surged Friday in reaction to the jobs data, which ramped up Treasury yields on the prospect of interest rates staying higher for longer.
Tokyo - Nikkei 225: UP 0.6 percent at 36,358.21 (break)
Hong Kong - Hang Seng Index: DOWN 0.3 percent at 15,480.27
Shanghai - Composite: DOWN 2.1 percent at 2,672.98
Dollar/yen: UP at 148.43 yen from 148.30 yen on Friday
Euro/dollar: DOWN at $1.0781 from $1.0794
Pound/dollar: DOWN at $1.2609 from $1.2639
Euro/pound: UP at 85.49 pence from 85.38 pence
West Texas Intermediate: UP 0.2 percent at $72.43 per barrel
Brent North Sea Crude: UP 0.3 percent at $77.56 per barrel
New York - Dow: UP 0.4 percent at 38,654.42 (close)
London - FTSE 100: DOWN 0.1 percent at 7,615.54 (close)
