(MENAFN- AFP) Asian shares brushed off a positive Wall Street lead to retreat for a second-straight day Tuesday, while official data pointed to further weakness in China's economy.
The euro continued to flounder against the greenback a day after the European Central Bank launched its stimulus "bazooka", although the dollar pushed towards an eight-year high against the yen as dealers bet on a US interest rate hike.
News that China's consumer price inflation rebounded in February from a more-than-five-year low was overshadowed by a steep drop in consumer prices, indicating more softness down the line.
In afternoon trade Hong Kong was 0.77 percent lower and Shanghai gave back 0.34 percent.
Tokyo fell 0.67 percent, or 125.44 points, to 18,665.11 and Seoul shed 0.40 percent, or 8.05 points, to end at 1,984.77.
However, Sydney was flat, edging up 2.9 points to 5,824.2.
The losses came despite a positive day in New York, with the three main indexes ending higher after Apple launched its long-awaited watch, while GM announced a $5-billion share buyback.
The Dow rose 0.78 percent and the S&P 500 gained 0.39 percent. The tech-rich Nasdaq advanced 0.31 percent.
In China, the National Bureau of Statistics said consumer inflation hit 1.4 percent in February, well up from 0.8 percent the previous month and much better than the 1.0 percent forecast.
However, the NBS also said the price of goods at the factory gate slumped 4.8 percent, the worst result since October 2009, driven by falling energy prices.
- Dollar rallies -
The data come after authorities cut interest rates in November as well as last month.
"Today's data showed that China is in danger of deflation," said Christopher Wong, a Singapore-based senior investment manager at Aberdeen Asset Management.
"The economic situation there is very tough while the relaxation of its monetary policy is still behind the curve."
Tokyo's Nikkei was Asia's best performer in early dealing as exporters were supported by the weakening yen.
The dollar bought 121.80 yen in afternoon Asian trade, up from 121.15 yen in New York late Monday and approaching the 122.21 yen mark last touched in July 2007.
The greenback continued to rally after Friday's blistering US jobs report fanned speculation the Federal Reserve will hike interest rates as soon as June.
"The US economy is moving in the right direction, and expectations of a rate hike should continue until the Fed's meeting next week, which means the yen could continue to weaken against the dollar," Toshihiko Matsuno, chief strategist at SMBC Friend Securities in Tokyo, said.
In other currency trade, the euro bought $1.0795 and 131.45 yen on Tuesday against $1.0854 and 131.49 yen.
The ECB kicked off its 60 billion-euro-a-month asset-buying scheme Monday hoping it will fend off deflation in the eurozone and also kick-start economic growth.
However, there remain worries about Greece's bailout extension as it starts technical talks this week with its regional partners.
Oil prices were mixed. US benchmark West Texas Intermediate gained one cent to $50.01 while Brent eased 16 cents to $58.37.
Gold fetched $1,159.93 against $1,174.98 late Monday.
In other markets:
-- Taipei fell 0.28 percent, or 26.45 points, to 9.536.53.
Acer eased 2.29 percent to Tw$21.35 while Taiwan Semiconductor Manufacturing Co. slipped 1.03 percent to Tw$144.0.
-- Wellington slipped 0.16 percent, or 9.21 points, to 5,887.75.
Telecom giant Spark slipped 1.82 percent to NZ$3.24, Mighty River Power lost 3.24 percent to NZ$3.29 and Auckland Airport was off 0.44 percent at NZ$4.53.
-- Bloomberg News contributed to this story --
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