(MENAFN- AFP) Asian markets were mixed on Tuesday, with Tokyo jumping more than one percent as the yen sank against the dollar, while investors were keeping an eye on the stand-off between Russia and the West over Ukraine.
With Wall Street closed for the Labor Day weekend investors were given an anaemic lead from Europe following a disappointing set of manufacturing figures.
Tokyo climbed 1.29 percent by the break and Seoul lost 0.52 percent, while Hong Kong shed 0.21 percent and Shanghai was up 0.24 percent. Sydney was flat.
The Nikkei was the stand-out performer Tuesday as the dollar edged towards 105 yen, a level not seen since the start of the year, with analysts suggesting dealers are betting on the Bank of Japan to loosen monetary policy.
Osamu Takashima, chief FX strategist at Citigroup Global Markets Japan, said in a note that recent weakness in the yen suggests dealers "have quietly started factoring in the BoJ's additional monetary easing".
The bank holds a two-day policy meeting this week following a string of weak data, with its policymakers facing calls to unveil new economy-boosting measures, which would tend to weigh on the yen.
Against that the US Federal Reserve is being urged in some quarters to hike interest rates - which lift the dollar - as the world's number one economy gets back on track.
In morning Asian trade the dollar was at 104.70 yen, against 104.27 yen in European trade and well up from 104.18 yen in Tokyo earlier Monday. The yen also eased to 137.18 yen from 136.94 yen in Europe.
However, the euro dipped to $1.3119 from $1.3133, with expectations increasing that the European Central Bank will announce policies at a meeting this week to fight off deflation in the troubled bloc.
Pressure increased Monday on the bank to move after an index of eurozone manufacturing showed activity slipped in August.
Markit's purchasing managers' index (PMI) fell to 50.7, from 51.8 in July. While anything above 50 shows growth the sharp drop has fuelled fears for the region.
Dealers are keeping watch on events on eastern Europe after NATO accused Russia of sending in around 1,000 troops to support anti-government rebels in Ukraine's east.
That came a day after Russian President Vladimir Putin called for the first time for statehood to be discussed for the restive region
The events have raised fears of a conflict in Europe and led the West to warn of fresh sanctions against Moscow, while German President Joachim Gauck said Putin has "effectively severed its partnership" with Europe and wants to establish a new order.
Oil prices were mixed. US benchmark West Texas Intermediate for October delivery eased 14 cents to $95.82 while Brent crude for October rose one cent to $102.80.
Gold traded at $1,283.19 an ounce at 0230 GMT, from $1,286.98 late Monday.
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