Asian markets mostly fall on US rate hike, Chinese data

Most Asian markets fell on Monday as investors prepare for a US interest rate hike and after weak Chinese data added to concerns over the health of the world's number two economy.

The dollar gained against the yen after upbeat jobs data on Friday added to expectations the US central bank will raise interest rates as early as September.

Tokyo equities opened 0.51 percent lower, Hong Kong dropped 1.69 percent in early trading while Seoul dipped 0.75 percent.

In Sydney, shares rose 0.51 percent, rebounding after a week that knocked 3.6 percent off the market on concerns over the health of the Australia's banks.

But in Shanghai, shares added 1.12 percent after the open, buoyed by news of more market intervention by authorities and reports two major shipping companies could merge.

"Share markets are likely to remain volatile in the next few months," Shane Oliver, global strategist at AMP Capital in Sydney, told Bloomberg News.

"Uncertainties remain regarding Chinese economic growth and a likely Fed interest-rate hike lies ahead for later this year."

China on Sunday said inflation rose 1.6 percent in July, well below the government's annual target of three percent, while producer prices declined to their lowest level since 2009.

That added to concerns over the health of Asia's largest economy after trade data showed exports plunged 8.3 percent from a year earlier, while imports dropped 8.1 percent.

The news will likely hit commodities and particularly base metals, analysts said, which plumbed multi-year lows last week over signs demand is waning in massive importer China.

Upbeat data Friday showing the US added 215,000 jobs in July and unemployment held steady at a seven-year low also fuelled predictions the Federal Reserve could raise rates as early as September.

Higher rates tend to push up the US currency, which in turn makes dollar-priced commodities less attractive to international investors and so dents prices.

In Tokyo currency markets, the dollar fetched 124.35 yen early Monday against 124.22 yen in New York late Friday.

The euro was at $1.0957 and 136.25 yen compared with $1.0962 and 136.16 yen in US trade.

"With each data point that comes in near expectations the likelihood of a September rate hike continues to steadily increase," said market analyst Angus Nicholson at IG Markets.

"Trade and inflation data out of China over the weekend (also) do not augur well for the battered commodities market this week."

But in China, where shares have been on a rollercoaster ride since authorities unleashed measures to stop a 30 percent plunge in the market, investors were cheered by news of fresh intervention.

Shares rose after China's securities regulator said Friday it had called on securities brokers and fund managers to help stabilise the market after a steep sell off in recent weeks.

Bloomberg News also reported that China is considering a merger of China Shipping Group and Cosco Group, citing people familiar with the matter.

Gold fetched $1,093.28, up from $1,089.64 late Friday and above last week's low of $1,072.34 -- its lowest level since February 2010.