London/Tokyo - Asian shares fell and US stock futures pointed lower on Monday in holiday-thinned trade after a sharp slowdown in US jobs growth raised concerns about the strength of the world's largest economy.
Oil, which has climbed nearly $20 this year on worries that a standoff between Tehran and the West would escalate and disrupt oil exports from the Middle East, dropped more than a dollar after Tehran agreed to resume talks on its nuclear programme.
Brent crude was down $1.19 a barrel to $122.24 by 11:10 GMT after slipping below $122 earlier in the day. US oil traded $1.46 a barrel lower at $101.85.
"The talks are good news. They are going to ease some stress from the oil market but not enough to bring oil below its current trading range," said Ken Hasegawa, a commodity derivatives manager at Newedge Brokerage in Tokyo.
Some Asian markets, including Australia and Hong Kong, and all major European markets were closed. For most of those that were open economic data past, present and future set the tone.
Friday's report showed US payrolls grew by 120 000 in March, the smallest rise since October, prompting investors to curb risk exposure ahead of more US data and earnings as well as key figures from China this week.
Gold inched up after the lacklustre US jobs report revived hopes for further monetary easing, while a spike in Chinese prices burnished the precious metal's appeal as an inflation hedge.
MSCI's broadest index of Asia Pacific shares outside Japan slipped 0.8% near to a four-week low hit last week. Japan's Nikkei average closed down 1.5%, with a firmer yen also dampening sentiment.
US equities have rallied sharply in recent months, gaining nearly 30% since early October to push the S&P 500 near four-year highs. The market has stalled in the last few weeks as investors question the swiftness of the gains and whether economic data is strong enough to warrant higher stock prices.
"Markets had been excessively pricing in the US economic recovery and must now fill the gap between the reality and prices built on perceived strength of the economy," said Naohiro Niimura, a partner at research and consulting firm Market Risk Advisory Co.
China focus
China's annual inflation rate jumped to 3.6% in March, with volatile food prices leading a temporary rebound that pushed costs above expectations but left intact the view that Beijing has enough flexibility to ease monetary policy to support growth.
"There are mixed views on the data. My view is that any reserve requirement ratio cuts would not come in April as a result of the data," said Chen Yi, analyst at Xiangcai Securities in Shanghai, referring to the reserve requirement ratio for banks, a key policy tool used by the central bank.
Data due this week from China, the world's second-largest economy after the United States, include trade on Tuesday and first-quarter gross domestic product on Friday.
China's economy likely grew at its slowest pace in nearly three years between January and March at a rate of just 8.3%, a Reuters poll estimates, still well above the government's full-year growth target of 7.5% and pointing to a soft landing for the economy.
The dollar extended its loss against the yen to hit a one-month low of ¥81.19, but was up 0.3% against the euro at $1.3074.
The dollar may remain pressured as currency speculators trimmed their long positions in the latest week, while net shorts on the yen shrank slightly from the previous week. To be short a currency is to bet it will decline in value, while being long takes a view its value will rise.
Barclays Capital analysts said it was too early to conclude US jobs growth had entered a falling trend as cyclical sectors such as manufacturing and leisure remained relatively strong.
In the week to come, US markets will focus on the company reporting season, with earnings likely rising 3.2% for the first quarter. But that figure dwindles to 1.8% on the year when excluding Apple, the world's biggest company by market value.