[WELLINGTON] The US dollar solidified gains against the yen, headed for its best month since 2014 versus major peers amid mounting speculation the Federal Reserve will hike interest rates again this summer. Gold attempted a rebound.
Fed officials including Chair Janet Yellen have sought to flag the possibility of a rate increase as soon as June over the past two weeks, fueling a resurgence in the greenback while weighing on bonds and precious metals.
Gold rose for the first time in 10 days, snapping its longest selloff in more than a year, while crude oil increased from Friday levels as US markets resumed following Monday's holiday.
Asian index futures were mixed, with the regional benchmark headed for its first monthly drop since February.
With markets in America and the UK closed last session, the Fed's rate outlook continued to occupy investors, with traders putting odds of a hike in July at more than 50 per cent.
As US officials emphasise that any policy tightening is dependent on the economy showing improvement, investors will be scrutinising American payrolls and personal income data due this week.
The prospect of higher US yields has revived the greenback, with a gauge of the currency versus major peers up almost 4 per cent this month. Meanwhile, the potential for more Japanese stimulus is weighing on the yen.
"US policy normalisation and its likely impact has remained a key theme for markets," Mark Smith, a senior economist in Auckland at ANZ Bank New Zealand, said in a note to clients.
"The dilemma facing the data-dependent Fed is that some US data does not look as strong as it once did, with the manufacturing sector under the pump. At some stage the Fed will choose which course of action it will take, and trust that the economy - and financial markets - are resilient enough to bear it."
Figures on personal spending and income greet investors in the US returning from Monday's Memorial Day holiday, with the jobs data due on Friday.
Japan releases a swathe of data Tuesday, from the jobless rate to factory output and car production, while data on Australian building approvals is also due. Singapore and Indonesia update on money supply, Thailand reports on trade and Hong Kong posts on retail sales. Later in the session, India will report on first-quarter gross domestic product.
New Zealand's S&P/NZX 50 Index, the first major stock gauge to start trading each day, added 0.2 per cent as of 8.17am. Tokyo time, rising for a fifth straight day. Futures on the S&P 500 Index were up 0.2 per cent from Friday's close, to 2,100.50. Comments from Yellen on Friday supporting the case for a rate hike in the next few months sent the U.S. benchmark up 0.4 per cent when it last traded.
In Japan, futures on the Nikkei 225 Stock Average were down 0.2 per cent to 17,040 as of 3am in Osaka, while yen- denominated contracts on the index traded in Chicago registered a 0.7 per cent increase from Friday, to 17,025. Nikkei futures in Singapore were down 0.2 per cent to 17,045.
Futures on Australia's S&P/ASX 200 Index dropped 0.1 per cent in most recent trading, while those on the Kospi index in Seoul were little changed. In Hong Kong, futures on the Hang Seng and the Hang Seng China Enterprises indexes rose at least 0.2 per cent, and contracts on the FTSE China A50 Index dropped 0.1 per cent.
For more on Chinese equity trading and mounting short bets, click here.
The MSCI Emerging Markets Index dropped 0.1 per cent on Monday as most developing-nation currencies slid.
"People are digesting Yellen's speech," said Guillaume Tresca, a senior emerging-market strategist at Credit Agricole CIB in Paris. "There's been a repricing of Fed rate-hike expectations, so the environment will be less supportive for emerging markets in the days ahead."