China stocks hit by trade data, but weak yen lifts Tokyo

Shanghai stocks tumbled almost three percent Monday on another disappointing Chinese trade report, but Tokyo was boosted by a weaker yen after US jobs data reinforced expectations for more interest rate hikes this year.

Beijing at the weekend released figures showing exports fell almost two percent last month while imports plunged nearly 11 percent, stoking fresh fears about the state of the world's number two economy.

The figures were a disappointment after a March report showing a surge in overseas shipments had raised hopes that a growth slowdown in China was finally bottoming out.

Shanghai closed 2.8 percent down, extending a similar loss Friday.

Fears about China's growing debt bubble were back on the agenda, as the leadership's official mouthpiece newspaper said Monday the country must bring an end to credit-driven growth to avoid a financial crisis.

The People's Daily article, which comes as leaders struggle to cap rising bad loans and other risks, could be a signal that Beijing is to rein in monetary stimulus efforts, analysts said.
Among other markets, Seoul was 0.5 percent lower, but Sydney reversed early losses to gain 0.5 percent. Hong Kong ended up 0.2 percent.

Tokyo closed 0.7 percent higher as exporters were boosted by a dip in the yen against the dollar.

Japanese officials Monday kept up their war of words in the hope of taming the surging currency, with Finance Minister Taro Aso telling parliament that "wide fluctuations and rapid movements are not desirable".

The greenback built on last week's gains after the US Labor Department said fewer jobs were created last month than were forecast but that wages grew a healthy 2.5 percent on-year.

Analysts also said the headline jobs figure was skewed by weakness in the construction and retail sectors, which had enjoyed strong gains earlier in the year.

While a weak jobs reading would usually lower expectations for another rate hike, analysts said the readings suggested another rise could come but would be small and gradual.

- Greece on agenda -
The dollar rose to 107.59 yen in Asia from 107.14 yen in New York at the end of last week.

"The yen has more scope for losses against the dollar if Fed officials keep their hawkish tone," Masafumi Yamamoto, chief currency strategist in Tokyo at Mizuho Securities, wrote in a note to clients, according to Bloomberg News.

"Against the dollar, the yen seems to have priced in both positive and negative aspects of the jobs report."

Last week two regional Fed presidents suggested another increase could come as soon as June.

The dollar also edged up against the euro, despite news that Greece had adopted a package of strict pension cuts and tax hikes to qualify for its next tranche of EU-IMF bailout cash. Dealers are now awaiting a meeting of eurozone finance ministers to review the country's progress before deciding whether to release the cash.

On crude markets both key contracts rose after Canadian oil sands producers cut back output as huge wildfires continue to spread in Alberta, the centre of the country's huge deposits and the world's third largest. 

While the blaze has not directly damaged mining sites, the evacuation of more than 100,000 people has forced companies to slash production.

Dealers are also keeping tabs on Saudi Arabia, the world's biggest producer, which at the weekend sacked its long-serving oil minister in a major government overhaul.

West Texas Intermediate climbed two percent while Brent was up 1.5 percent.

In early European trade London rose 0.4 percent, Frankfurt added 0.6 percent and Paris gained 0.5 percent.

- Key figures around 0815 GMT -

Tokyo: Nikkei 225: UP 0.7 percent at 16,216.03 (close)

Shanghai: DOWN 2.8 percent at 2,832.11 (close)

Hong Kong: UP 0.2 percent at 20,156.81 (close)

London - FTSE 100: UP 0.4 percent at 6,152.09

Euro/dollar: DOWN at $1.1395 from $1.1403 Friday 

Dollar/yen: UP at 107.59 yen from 107.14 yen

New York - Dow: UP 0.5 percent at 17,740.63 (close)