CANBERA (dpa-AFX) - Asian stocks ended mixed on Monday as China's factory activity data disappointed and Bank of Japan Governor Kazuo Ueda gave one of his clearest indications that his board might increase interest rates soon.
Risk aversion ahead of a slew of U.S. economic data due this week as well as speculation over the appointment of the next Federal Reserve Chair also kept investors on edge.
Gold held near a six-week high in Asian trade as the dollar weakened on Fed rate cut expectations.
Oil prices climbed nearly 2 percent following additional Ukrainian attacks on Russian energy infrastructure and an escalation in tensions between the United States and Venezuela.
China's Shanghai Composite index rose 0.65 percent to 3,914.01 as increased hopes for a Fed rate cut offset data that showed China's manufacturing engine lost further steam in November.
China's official manufacturing PMI improved slightly from 49.0 to 49.2 in November but remained in contraction for the eighth consecutive month.
The private RatingDog manufacturing PMI surprised to the downside, dropping from 50.6 to 49.9 as the country's economic slowdown deepens.
Hong Kong's Hang Seng index edged up by 0.67 percent to 26,033.26, led by technology heavyweights.
Japanese markets tumbled, the yen rose against the dollar and the yield on the two-year government bonds rose to its highest level since 2008 after Bank of Japan Governor Kazuo Ueda said the central bank will weigh the pros and cons of raising its policy rate at its December 18-19 policy meeting.
The Nikkei average fell 1.89 percent to 49,303.28 while the broader Topix index settled 1.19 percent lower at 3,338.33.
Among the prominent decliners, Uniqlo brand owner Fast Retailing gave up 2.1 percent, chip-testing equipment maker Advantest lost 4.3 percent and optic fibre cable maker Fujikura slumped 8.9 percent.
Banks like Mitsubishi UFJ Financial and Sumitomo Mitsui Financial rose around 1.6 percent each on BOJ rate hike bets.
Seoul stocks ended lower after the release of mixed economic readings, with manufacturing activity contracting for the second consecutive month in November while exports surged on strong semiconductor and auto demand. The Kospi average slipped 0.16 percent to 3,920.37.
Australian markets declined, with banks underperforming on concerns the Reserve Bank of Australia may have reached the end of its easing cycle.
The benchmark S&P/ASX 200 dropped 0.57 percent to 8,565.20 amid caution ahead of the quarterly GDP report due on Wednesday.
Investor sentiment was also hurt by an outage to stock exchange operator ASX's announcements platform. The broader All Ordinaries index ended down 0.59 percent at 8,866.40.
Across the Tasman, New Zealand's benchmark S&P/NZX-50 index closed 0.30 percent lower at 13,448.49, pressured by heavy losses in the financial sector.
U.S. stocks advanced in thin trade on Friday as Wall Street returned from the Thanksgiving holiday for a shortened session.
The tech-heavy Nasdaq Composite climbed 0.7 percent but fell nearly 2 percent for November, ending a seven-month winning streak.
The Dow rose 0.6 percent and the S&P 500 added half a percent for their fifth consecutive session of gains.
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