Chinese shares led Asia markets down on Monday, as concerns about slower growth in the world's second-biggest economy checked risk appetite and took a large slice off Australian equities.
MSCI's broadest index of Asia-Pacific shares outside Japan ticked down 0.3 percent, led by Australian shares falling 1.0 percent.
Japan's Nikkei average was flat, reflecting sluggishness in much of Asia though mainland Chinese shares fell to two-month lows on news that Beijing is tightening its grip on interbank lending to defuse risks in shadow banks.
Earlier in the session, Chinese iron ore futures price slumped more than two percent, briefly falling below their lows hit in March.
"A sense of fragility has reappeared on the markets," Credit Agricole said in a note to clients.
"US data is definitely on the weak side, except for non-farm payrolls. The situation is quite similar in China, with demand indicators for April (fixed-asset investment and retail sales) signalling more downward pressures," it added.
Given some of the uncertainty about the global economic outlook, monetary support was a key theme for investors, with the European Central Bank taking centre stage as it seeks fresh steps next month to shore up the euro zone economy.
A few ECB policy makers will speak publicly later in the day, including Governing Council member Jens Weidmann, Executive Board member Yves Mersch.
Expectations that the European Central Bank is preparing a package of policy options for its early June meeting, including cuts in all its interest rates, have depressed bond yields not only in Europe but also in the United States last week.
Strong U.S. housing data released on Friday helped U.S. Treasuries yield bounce back from six-month lows, with the 10-year yield now at 2.523 percent, versus a six-month low of 2.473 percent.
Another focus, given a light data calendar in the next couple of days, is on the minutes of the Fed's policy meeting due on Wednesday, in which analysts expect to find a discussion on the Fed's exit strategy from super-easy policy.
"The positive U.S. housing data was reassuring. But a lot of investors are likely to take a wait-and-see stance given the lack of a strong catalyst for buying," said Tsuyoshi Shimizu, chief strategist at Mizuho Asset Management.
In the currency market, the euro remained under pressure on expectation of stimulus by the ECB following soft euro zone growth data published last week.
The euro traded little changed at $1.3705, not far from 2 1/2-mont low of $1.3648 touched on Thursday.
Against the yen, it changed hands at 139.18 yen, near three-month low of 138.77 yen hit on Friday.
The yen also had the upper hand on the dollar, after U.S. bond yields plunged last week, undermining yield attraction of the dollar.
The dollar traded at 101.55 yen, near the low end of its narrow trading band between 101.20 and 104.13 in the past three months.
Indian shares look set to extend their gains following an election victory last week by the opposition Bharatiya Janata Party and its allies, seen as more business-friendly than the outgoing Congress party.
Indonesian shares also hit one-year high on expectations that the leading presidential election candidate Joko "Jokowi" Widodo will pick up widely respected former vice-president Jusuf Kalla.
