Asia shares fall on mixed China price data, weak yen fails to aid Nikkei

Investing.com - Share in Tokyo fell on Tuesday despite a weaker yen that normally boost exporters as China price data presented a mixed picture on demand prospects for the region.

The Nikkei 225 fell 0.33% by the break with the S&P/ASX 200 was a tad down after a business survey disappointed and China price data was mixed.

The Shanghai Composite was off 0.11% as investors weighed the chances of lower interest rates.

Producer prices in China year-on-year for February fell 4.8%, more than the 4.3% decline expected. But consumer prices year-on-year for the same month rose 1.4%, faster than the 0.9% gain expected.

A mixed picture of inflation in February no doubt will fuel the debate over deflation and future rate cuts. CPI sharply beat market expectations and January's CPI could be the bottom of the current cycle. thereby easing pressure for the People's Bank of China to cut rates further.

The NAB February business conditions survey stayed at plus2 in February, while business confidence fell to zero from plus-3.

The fall in confidence is disappointing but not entirely surprising given news about the RBA cash-rate cut in February mostly talked of a weakening economy. This is in contrast to the RBA's admission it decided it was appropriate to provide additional support "not because things had turned for the worse but rather because of the lack of compelling signs that economic growth was picking up as was earlier expected."

Overnight, U.S. stocks rebounded on Monday following one of its worst days of the year at last week's close as a strong jobs reported exacerbated worries that the Federal Reserve could raise interest rates as early as June.

Monday's gain coincided with the six-year anniversary of a bull market, following the Financial Crisis of 2008.

After dropping nearly 300 points on Friday, the Dow Jones Industrial Average gained 0.78 % or 138.94 points to 17,995.72. Led by gains in the healthcare and industrial sector, the S&P 500 rose 0.39% or 8.17 points to 2,078.43. The NASDAQ Composite index also rose slightly, increasing 0.31% or 15.07 to 4,942.44.

Overnight, Friday’s stronger-than-expected U.S. employment report solidified expectations that the Federal Reserve will raise interest rates around the middle of this year, boosting the dollar.

The euro remained under pressure as the eurogroup of euro zone finance ministers prepared to hold talks to discuss a reform package put forward by Greece as part of its bailout review.

Last month Athens reached a temporary agreement with its lenders to extend its bailout by four months, but the reform package must be signed off by creditors before it can access further financial aid.

Ahead of the talks eurogroup head Jeroen Dijsselbloem warned that Greece must stop wasting time and start developing its reform package.

Also Monday, the European Central Bank confirmed that it started asset purchases under its quantitative easing program.