The Hang Seng Index extended its weekly rise to above 4% and traded at a four-year high as investors sought higher returns from riskier assets. The mainland-focused CSI 300 index advanced as regulators looked for ways to prevent excessive speculation and sustain the recent rally.
Japan's indexes advanced to new highs, and the yen hovered near a five-month low. Sentiment among large manufacturers improved in the third quarter, as U.S. customers front-loaded ahead of higher tariffs.
China's benchmark indexes hovered near four-year highs as investors overlooked elevated U.S.-China trade tensions and weakening operating margins for the makers of solar panels, electric vehicles and batteries, and renewable energy products.
China's overall consumer price index slipped back into decline amid persistent weak demand, industrial overcapacity, and stronger headwinds faced by exports. The producer price index declined for the 35th consecutive month in August.
Japan's stock indexes hit new intraday highs following overnight gains in New York, but caution returned as the ruling coalition struggled to elect the next prime minister.
Investors in China are looking forward to the release of inflation reports on Wednesday, and price trends are likely to confirm ongoing deflation trends.
Japan's second-quarter GDP growth was revised slightly higher, mainly driven by improving private consumption. The sudden resignation of Japan's prime minister and the setback in the US-Japan trade negotiation added to the market uncertainty.
Japan's real wages turned positive after seven months in July as they rose faster than inflation. Household spending rose a real 1.4% in July and advanced for the third consecutive month.
China indexes trimmed weekly losses to between 1% and 2% as investors remained cautious amid rising risks of regulatory interventions following a sharp rebound over the last four months.
Japan's bond yields hovered near 17-year highs, and he yen remained under pressure after the BoJ Governor Ueda reiterated the central bank's stance to hike rates as long as economic conditions support the move.
Japan's Nikkei 225 Stock Average and Topix faced headwinds amid rising global bond yields and persistent uncertainties linked to the U.S. trade policy.
